Thank Uncle Sam
Thank Uncle Sam
Peter Mallouk | April 20, 2020
TO STAVE OFF the financial impact of COVID-19, the government has unleashed an unprecedented array of stimulus programs, tax law changes and other incentives to encourage economic activity. Result: There’s a slew of financial planning opportunities that can benefit almost all of us. Here are nine of them:
1. Refinance your debts. With the Federal Reserve’s recent rate cut, interest rates are now at their lowest level since 2008. These lower rates will take time to filter through the lending system, but they’ll eventually manifest themselves as lower rates on mortgages, car loans and even credit cards.
Now is a great time to consider refinancing existing loans, especially your mortgage. Indeed, if you have enough equity in your home, you might consolidate some of your higher-cost debt with a cash-out refinancing, using proceeds from your mortgage to pay off, say, your credit card balances.
2. Fund retirement accounts early. If you’re still working, consider accelerating contributions to your IRA, as well as to your 401(k) or similar employer-sponsored retirement plan. By completing your annual contribution earlier in the year, you’ll enjoy a longer period of tax-favored growth, plus your contributions will buy stocks at prices that are well off their previous highs.
One caveat: If your 401(k) investments earn an employer match, confirm with your human resources department that changing the timing of your contributions won’t impact the match.
3. Check on your stimulus. The government is in the process of rolling out direct payments to taxpayers, with the amount received varying by income, marital status and number of dependents.
Unsure if you’ll receive a payment? This link https://www.kiplinger.com/tool/taxes/T023-S001-stimulus-check-calculator-2020/index.php can show you how much your payment might be. Want to get your payment faster with direct deposit or, alternatively, check on your payment’s status? Go here. https://www.irs.gov/coronavirus/economic-impact-payments
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