Broker Check

What the CARES Act means for retirees

| April 02, 2020
Share |

First and foremost, hope this email finds you and your family safe and healthy.

As you probably know, Congress passed the largest stimulus package in American history, the Coronavirus Aid, Relief, and Economic Security Act (CARES). This was done in an effort to combat some of the pandemic’s harmful economic effects. And while many American investors are feeling financially overwhelmed, retirees may be in an even trickier situation. Not only are you caught in this economic crunch, but you’re doubly burdened by the greater health threat this virus may have on older people. Because of that, Congress passed portions of the CARES Act to positively impact the health and wellbeing of retirees, as well as provisions that benefit those still significantly invested in the markets. Here are the portions of the stimulus bill that will likely have an impact on financial decisions you’ll be facing in the near future:

Stimulus check. One of the most talked about benefits of the stimulus package is the $1,200 stimulus payments for individuals who earned $75,000/year or less and $2,400 for married couples filing jointly that earned $150,000/year or less. This also includes seniors who don’t normally owe taxes and those claiming social security benefits, including retirement and disability. If you don’t need the extra money to make ends meet right now, consider tucking this check away in an emergency fund.

IRS tax deadline extension. The IRS is extending the federal income tax filing due date of April 15 to July 15, 2020 instead, without penalty or interest. This is an automatic extension that applies to all taxpayers, regardless of the amount owed, including individuals, trusts and estates, and those who pay self-employment tax.

IRA contribution extension. Along with the tax filing extension of July 15, 2020, comes an extended deadline for contributing to last year’s IRA. If you get a stimulus check and haven’t yet reached the $6,000 max (or $7,000 if you’re older than 50) for 2019, consider adding it there.

Required minimum distribution (RMD) suspended for 2020. Retirees will not be required to withdraw any amount from their retirement accounts, and no penalties will be assessed.

Nursing home and senior living attention and funding. Both the Centers for Medicare and Medicaid Services will get additional funding with the intention of providing safer, cleaner facilities to prevent the spread of the coronavirus.

Enhancements to Medicare and Medicaid services. There are numerous ways in which this law will assist in getting health services to retirees more quickly, including “telehealth" coverage, 90-day prescription refills and the extension of existing community-based, long-term care programs.

Many of these changes provide extra funding for unavoidable hardships, given the state of the economy and the state of global health. If you have any specific questions on how the coronavirus crisis will impact your retirement, let’s talk. As always, we’re here to help.

Share |

FSC Securities Form CRS

Check the background of your financial professional on FINRA's BrokerCheck.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named representative, broker - dealer, state - or SEC - registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Securities and investment advisory services offered through FSC Securities Corporation (FSC), member FINRA/SIPC, Additional investment advisory services offered through Cathy A. Wagner, CFP®. FSC is separately owned and other entities and/or marketing names, products or services referenced here are independent of FSC.  FSC does not provide tax or legal advice.  

In this regard, this communication is strictly intended for individuals residing in the states of AL, AZ, CA, CO, DE, FL, GA, IA, IL, MA, MD, MI, MS, NC, NH, NJ, NM, NV, NY, OH, OR, PA, PR, SC, TN, TX, VA, WA, WI. No offers may be made or accepted from any resident outside the specific states referenced.

PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.