The U.S. unemployment rate is the percentage of unemployed workers in the total labor force and indicates the health of the U.S. economy. COVID-19 has significantly impacted unemployment to record numbers not previously seen since the government began tracking the data in 1939. COVID-19 has surpassed The Great Depression in the amount of unemployed and the economic fallout to businesses and workers.
When the U.S. economy is stagnant, the U.S. Government uses fiscal and monetary tools to stimulate the U.S. economy. However, with our economy facing multiple problems, that may not be an ‘easy fix’ in comparison to past recessions. COVID-19, social unrest, permanent business closings, and an upside-down GDP may prove to be difficult problems to overcome in the near term.
COVID-19 has changed the way that Americans shop and travel, impacting our spending habits indefinitely. With stores, hotels, and restaurants closed or at limited capacity, many choose to stay at home and purchase online or locally, helping to support their local small businesses. The positive impact of working from home, virtual meetings, and happy hours, on-line fitness classes, and being at home is that our consumption habits have changed. Read hear to learn why you should buy local and travel local.
As areas of the U.S. start to lift COVID-19 restrictions, Americans are starting to see the impact of increasing prices at the supermarket and the start of inflation. Here is the recommended steps toward protecting your financial future. While the CARES Act provided a one-time payment to individuals and for business stimulus, it will not solve our future economic problems since government action always comes with a price.
Investors want to enjoy a good night’s sleep each night because they’ve done their work, know what to expect, and that nothing comes as a surprise to them. However, in times of uncertainty, most of us let our emotions get the best of us, especially about our investments. Part of the luxury of a good night’s sleep is being financially educated and planning for when things don’t go as expected, as well as when they do. With the uncertainty of today, keep in mind what you can and can’t control and help avoid emotional investing:
The CARES Act (The Coronavirus Aid, Relief, and Economic Security Act) became law on March 27th, 2020. It contains significant legislation for Required Minimum Distributions (RMD) for those over age 70 ½ who have already started RMD. Under previous IRS distribution laws, a minimum distribution from a pre-tax retirement savings account, such as a 401(k), IRA, or other tax-sheltered accounts, would have to happen in 2020 to avoid the penalty for not taking a distribution. Under the CARES Act, no RMD is required for individuals or beneficiaries of inherited retirement accounts in 2020 due to COVID-19. How will this help investors?
When investors think of ‘safe investments,’ they tend to think of bonds or CDs, which calculate from a pre-determined timeline and interest rates. During a low-interest-rate environment, both provide safety, but not necessarily, the returns investors are seeking. Bonds and CDs have differing benefits and risks despite being viewed by investors as ‘safe.’
COVID-19 has changed the way we interact with others and our ability to work. Currently, one in four worldwide confirmed COVID-19 cases is occurring in the U.S. The halting of economic activity is expected to damage our economy more than any other previous occurrence. While remote work is happening at some companies, many Americans are unable to collect their regular paychecks and are waiting on unemployment assistance from their state. Undoubtedly this will negatively impact Social Security tax collection and the Social Security Retirement System. Here’s why:
When you think about tax-free income in retirement, the traditional vehicles likely come to mind. Such as your 401(k) or 403(b), traditional and Roth IRAs, and your personal savings account. What you may not consider, however, is that life insurance can also function as a form of retirement income – with tax advantages.
Safeguarding your financial future is important. No one likes to think about the impact of their death on their loved ones. But the reality is, not having certain elements in place can turn a tragic situation into a financial crisis. Having these safeguards in place can help provide your family with the financial security they need should the unexpected happen.