INDIANAPOLIS, Ind. – Unemployment has hovered around four percent for several years, but it’s expected to skyrocket to 15 percent in April—numbers not seen since the Great Depression. That’s why the CARE’S ACT and its next legislation are vital to so many.
FOX59 is looking into what’s contained in the law, how you can learn where you check is, if you’re getting one and what you should do with the money.
“If you have a 401k, or any kind of investments and you are checking your balance on a daily basis, it’s going to drive you insane,” said Casey Marx of Crown Haven Wealth Advisors.
That’s because stocks and bonds and 401ks are all over the place. There’s a good chance your investments dropped 30 to 40%, and may have now bounced back half way since the mid-March. Experts believe the recovery will be slow, and that’s where CARE’s Act comes in. It can’t make up for everything lost, but the legislation allows up to $1,200 to individuals and $500 for children. Those making more than $99,000 a year are not eligible.
“One of the biggest questions is about social security. Those receiving social security benefits are eligible for a check also and that money does not need to be claimed as earned income when it comes to filing taxes, so that’s great news,” said Marx.
The legislation also expands unemployment benefits and offers loans to small businesses. But many say they still can’t get a loan because the system is jammed and many banks are having trouble with the processing of applications.
As far as your possible 401k, don’t panic, but don’t ignore it.
“Investing a lot of times is controlled by our emotions and it’s common to feel nervous or anxious when the stock market drops. But you can use this experience as a test to tell you whether you’re comfortable with the risk you’re taking. If you’re not comfortable with the risk you’re taking, ask an advisor, what’s a better plan for you. You can also ask if it too late to change this time, and should you personally just ride it out. There is no one size fits all,” said Marx.
And what should you do with that check if you’re getting one? Pay major bills first, then if you have extra, pay credit cards. The avalanche method encourages you to tackle the debt with the highest interest rate first. The snowball method encourages you to pay off the debt with the smallest balance first. On top of that, always pay off minimum balances on all bills, and ask for delays if necessary. If needed, you can also apply for mortgage forbearance, where you don’t have to pay for up to a year. Marx says, they don’t take a lot of risks at Crown Haven Wealth Advisors and they also don’t see big drops in peoples portfolio’s.
“We offer a retire shield that goes through income planning, risk management, tax planning, healthcare planning and legacy planning,” said Marx.
No matter who your advisor is, if you have one, get a second opinion to determine if this is something you want to go through again. The next legislation or relief bill is still being debated by Congress. Republicans want it passed as-is, but Democrats are pushing for more money for hospitals and local and state governments that are running out of money. If you’re expecting a check and haven’t gotten one, you can go to the IRS web page called “Get My Payment” where you can track it.