What You Need to Know About the CARES Act
With March behind us, we turn our attention to April and a new normal for people all across the country. Millions of Americans are out of work while many others have shifted to working from home.
Thankfully there is some relief ahead for most people after Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in the final days of March. The stimulus bill will try to do exactly what it’s been named and that will provide aid in many different forms for individuals, businesses, and the economy.
If you want to read through the entire bill, you can do so on the government’s website here but we want to take some time to walk you through the key financial pieces to this package. That’s what we’ll do on this episode of Money Wisdom with Joel Johnson.
Of course the first thing most people are talking about is the $1,200 payment that will go to individuals. Most families of four will receive around $3,000, which will be used in different ways. This goal of this money isn’t to replace paychecks with unemployment soaring to more than 6 million. It’s to stimulate the economy by injecting it with this additional cash.
You might be worried about the long-term effects of a $2.2 trillion stimulus package but the administration is trying to keep the country out of another depression, which would increase the damages even further.
Along with this payment, the CARES Act will implement a few changes that may directly affect your planning. The first is required minimum distributions will no longer be required for 2020. We’ll have Joel explain why this is an important move. The second is people now have the option to pull money out of retirement accounts early without having to pay the penalty. That might seem like a good thing, but Joel will explain why this is probably not something you want to do.
Before we get into any of that today, Joel will pull back the curtain on his home studio where he’s recording the show from now and explain why he bought 100 yards of ethernet cable for his computer.
Thanks for listening to this episode. We’ll be back again next week for another show.
[0:20] – Joel recording from home after setting up all the equipment.
[2:08] – Congress passed the stimulus bill. What’s Joel’s opinion on the $1,200 payment for individuals.
[4:07] – What about the long-term effects?
[4:45] – RMDs for 2020 are no longer required. Why is this important?
[7:57] – You can now pull money out of IRAs and 401ks without the penalty. Would this be something you’d want to consider?
[9:51] – What kind of conversations is Joel having with clients in recent weeks?
