With shelter-in-place occurring all across America, it feels like the world is healing. Pollution has decreased. I see more animals running around my neighborhood. Traffic accidents are way down. We no longer hear about school shootings. And for the first time since September 2019, nobody in my household has even a runny nose!
The CARES Act Pandemic Stimulus Package should hold over millions of Americans for the month of April. Let me share some of the best parts of the CARES Act.
Best Parts Of The CARES Act Pandemic Stimulus Package
Here are some highlights of the CARES Act that I think will really help a lot of Americans.
- Most individual taxpayers should get $1,200 and joint filers would get $2,400 if AGI is under $75,000 for single filers, $150,000 for joint returns, and $112,500 for head of household based on 2018 or 2019 federal tax returns. Once you make over $98,000 as an individual without children, and $198,000 as a couple without children, you no longer get any benefits. A family with two children will no longer be eligible for any payments if its income surpassed $218,000. Payments should automatically arrive within three weeks and are not taxable.
- People who are receiving Social Security retirement and disability payments each monthly also get a stimulus payment. This is great for helping our disabled and older folks.
- If you file for unemployment benefits, the federal stimulus bill that just passed will add an extra $600 per week on top of your normal unemployment benefit for the next 4 months. Total weeks of unemployment benefits is up to 39 weeks (26 weeks from state, 13 additional weeks from this new bill).
- Gig workers, freelancers, and independent contractors are also eligible for unemployment benefits. This is a huge win because the downside to being a freelancer is that there's no safety net.
- If you have federal student loans, your interest rate will automatically be set to zero and the payments will be suspended through September 30th, 2020. Check online to make sure. The six months suspension will still count towards the Public Service Loan Forgiveness program.
- You can withdraw up to $100,000 from your IRA, and double the normal amount from your 401(k) 10% penalty-free in 2020. If you own any capital gains tax, you can spread the tax liability out over three years.
The CARES Act Stimulus Package Should Help
If the CARES Act proves to be inadequate, then I fully expect another relief package of similar magnitude for May and so forth. The government has clearly stated they will do whatever it takes to help the American people hurting the most.
A lot of people have started to wonder what the inflationary effects are of such massive fiscal and monetary stimulus. Don't worry. The economy is sinking like a boulder into the ocean and we're doing everything possible to try and prevent it from crashing a mile down. Inflation is the least of our worries!
My hope is that the millions of Americans who need relief get relief from the CARES Act. As a result, most April bills will eventually be paid, thereby avoiding a deleterious domino effect. By May 1, hopefully, we will see our virus curve start to flatten and by 3Q, we can return to the old days with some safety modifications.
But before then, expect stock market volatility to remain high. We may even test the bottom again. If we do, I will be buying with any excess cash flow I have.
Stay On Top Of Your finances
During times of uncertainty, it is vital for you to stay on top of your finances. If you're new here, check out Personal Capital to track your net worth, x-ray your investments for excessive fees, and manage your cash flow.
After you link all your accounts, use their Retirement Planning calculator that pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. Your finances are too important to be left up to pontification.
Good luck and stay safe! During bear markets, focus on the things you still have rather than the things you've lost.
Regards,
Sam, Financial Freedom Sooner Rather Than Later