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Notes from a Social Distance

| April 04, 2020
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There are two sayings that are resonating with me right now. The first comes from my daughters' high school: Function in disaster, finish in style. For now, we will all do the best we can to get through. When this is over, and things go back to normal, past history tells us that we will see a tremendous resurgence.
The other is that it is always darkest before the dawn. Make no mistake, things are going to hurt for the next few months. But we will get through this together.
And on that note, I have a number of resources and other information for you. Please feel free to share if you think it's appropriate.
  • Stimulus Checks: If you are single and had a 2019 adjusted gross income of less than $75,000, or $150,000 as a married couple, you’ll be receiving a stimulus check of $1,200, plus $500 more for each child. If you are fortunate enough to still have your paycheck coming in, some great things to do with the money are to pay down debt and build your cash reserves. Other options include buying low by investing it, or donating to one of the many local non-profits that are struggling right now. The New York Times has a great Q&A about the stimulus checks here.
  • RMDs: If you are taking Required Minimum Distributions, or RMD’s from an IRA or other retirement account, the CARES Act waives the RMD requirement for 2020. This includes inherited IRAs. If you do not need the money, you can leave that distribution in the account.
  • Taxes and IRA Contributions: In addition to the filing and payment deadline for 2019 taxes being moved to July 15th, the IRA contribution deadline has also been moved. You have until July 15th to fund your IRA for 2019. As long as you have earned income, you can make a contribution to an IRA (income limits affect tax-deductibility).
  • Retirement Account Withdrawals: While we generally only recommend tapping retirement funds as a last resort, we know that these are extraordinary times. If you do need to tap into your retirement accounts, the law waives the 10% penalty for up to $100,000 of withdrawals for affected individuals under 59 ½. It also allows you to spread the taxes due on the withdrawal over three years, and even repay the withdrawal over the three-year period.
  • Retirement Account Loans: The limit for 401(k) loans has increased, from a maximum of 50% of your account balance, or $50,000, whichever is lower, to $100,000 or 100% of your account balance, whichever is lower. Repayment will not need to start until January 2021. 

  • Student Loans: There is also a provision for federal student loans, suspending payments and interest for six months, in the Act. Please visit myfedloan.org for more information about the impact on student loans. 
  • Mortgage Forbearance: The CARES Act also includes provisions to protect your home. You can find more information on the Consumer Financial Protection Bureau's website.
We are here for you, your questions, your concerns. Stay safe and well.
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