AARP Bulletin Vol. 61 #4 May 2020
It hasn’t been declared a recession, however, you have probably seen the value of your retirement IRA continue to fall and unemployment at an all time high. Many things are out of your control, but let’s look at some areas you do have some control over.
The CARES Act provides $1,200 per individual with either a direct deposit into your bank account or a government issued check. There are stipulations on this, you must have filed a federal income tax return for 2018 or currently receiving Social Security and not earned more than $75,000 as an individual or $150,000 for joint filers, plus $500 per dependent up to four that are under age 17. This could mean up to $3,400 for a family of four. If you did not file your 2018 Federal tax return the US Treasury Department is launching a web-based portal for these persons to provide their banking information so that they may receive their payments immediately as opposed to a check in the mail. For the most up to date information, click here .
The May, 2020, issue of AARP Bulletin states; Under the CARES Act, enacted March 27, people who were laid off because of the coronavirus are eligible to get an additional $600 per week until July 31, 2020. This federally funded $600 weekly benefit extends to people who aren’t traditionally covered by state unemployment insurance. Under what’s called the Pandemic Unemployment Assistance program, the self-employed, independent contractors and so-called gig workers are covered by unemployment for up to 39 weeks if they lost their jobs as a direct result of the pandemic. Another program, the Pandemic Emergency Unemployment Compensation program, gives an additional 13 weeks of federally funded unemployment insurance payments.
If you are Social Security retirement age (62 if born before 1955, or 66 if born after 1955) you may look into filing for Social Security benefits. This may allow you to refrain from tapping into your savings. Additionally, you have 12 months to withdraw your claim and repay the money you received interest free. Using this tactic may give your investment portfolio time to regain some of the losses. However, if you DON’T rescind the filing and pay back the money within the 12 months, it becomes permanent.
An additional benefit of the Coronavirus relief package is that you don’t have to take the Required Minimum Distributions (RMD) from your retirement accounts this year. These are the required distributions of your traditional IRA’s, 401K’s and retirement accounts at age of 70.