|The recently passed $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act is 800 pages long. If you’re like me, your head is swimming with all the details floating around and trying to figure out what all of this means to you and your family. Hopefully, this will shed some light.
How Much Would I Get – Single individuals would receive a one-time payment of $1,200 and married couples would receive $2,400. In addition, parents would receive $500 for each child under 17. Payments start phasing out for individuals making more than $75,000, and those making more than $99,000 would not qualify at all. According to the Treasury Secretary, most payments would be received via direct deposit sometime in mid-April.
For Those Who Have Lost a Job – In addition to state unemployment benefits, which vary by state, the federal government would give jobless workers an additional $600 a week for up to four months. The act also includes a pandemic unemployment assistance program that provides jobless benefits to those partially unemployed, self-employed and others affected by the virus who don’t qualify for traditional benefits.
Help For Small Businesses – Under the stimulus package, the Small Business Association will oversee the Paycheck Protection Program, which will distribute $350 billion to small businesses that can be partially forgiven if the companies meet certain requirements. The loans will be available to companies with 500 or fewer employees.
Student Loan Payments – The Department of Education would suspend payments on student loan borrowers without penalty through September 30.
For more information on the act, click here. I hope that you and your family stay well during these challenging times. If you need someone to talk to – whether it’s about real estate, the news or your favorite new binge watch – I am always here for you. We’re all in this together!
Help on the way for renters, homeowners
The first of the month may come with extra stress for renters and homeowners. As more people find themselves out of work making rent and mortgage payments is becoming a challenge.
The City of Austin says they are aware of the financial burden COVID-19 is causing for people and more help is on the way.
Last week Austin City Council passed a measure giving renters a 60-day grace period for making payments. Eviction hearings have also been delayed until at least May in Travis, Williamson and Hays counties. Now more assistance is in the works.
"We are seeing individuals contacting our non-profits and contacting the City of Austin directly who may not have previously done so," said Rebecca Giello deputy director for the City of Austin Neighborhood Housing and Community Development Department.
Currently the City of Austin says they are redirecting local funds to meet urgent needs and will also work to claim state and federal funds to help central Texans.
"What I would say to households that are impacted is... just as the COIVD-19 circumstances are very dynamic and rapidly evolving, so too is the response," said Giello. A list of resources for residents who need financial assistance can be found here.
"We have a team of experts in the City of Austin --both elected as well as administrative-- that are cohesively working together to respond in a way that will offer the greatest agility possible," said Giello.
The Austin Tenants Council has received hundreds of calls from people worried about paying rent. Their advice includes:
- If you can pay your rent-- pay it.
- Just because there's a grace period that doesn't mean rent payments are going to be forgiven.
- If you can't pay rent in full right now try setting up a payment plan with your landlord.
Nobody should be getting eviction notices right now under city orders, but even if they do the Austin Tenants Council says you do not need to move out until after a judge has made a decision in your case.
Homeowners concerned about making mortgage payments might be able to find relief too. Several banks are granting 90 day payment suspension for mortgage customers.
Mortgage suspension is not automatic so contact your bank to set it up if that's a service you need.
For an evolving list of housing resources and assistance, click here.
If you need free legal services, you can apply for representation and assistance through Volunteer Legal Services of Central Texas here.
Note: A previous version of this story mentioned the Housing Authority of the City of Austin. HACA is not a city program and does not have emergency funding to assist the public during COVID-19.
401(k) Withdrawal penalties waived
For a limited time, Americans will be able to withdraw money from tax-deferred accounts without penalties under a stimulus package signed into law Friday by President Trump. Rules on 401(k) loans will be relaxed, and some retirees can avoid so-called required minimum distribution, or RMD, rules that might have been onerous.
That’s needed because “with Covid-19, we are in uncharted territory,” said Will Hansen, chief government affairs officer for the American Retirement Association. “With 3.3 million people filing for unemployment last week, I think we’ll see a lot more usage of these provisions.”
The legislation requires that the money be a “coronavirus-related distribution,” but the rules are loose. People diagnosed with the virus are eligible, along with anyone who “experiences adverse financial consequences” as a result of the pandemic, including an inability to find work or child care. Retirement plan sponsors are told to rely on employees’ word that they’re eligible.
It also makes it easier to borrow money from 401(k) accounts, raising the limit to $100,000 from $50,000. The payment dates for any loans due the rest of 2020 will be extended for a year.
When retirees reach their early 70s, they’re required to start taking money out of tax-deferred accounts like 401(k)s and IRAs, and pay taxes on those distributions. The legislation waives those rules in 2020.
Without the change, retirees’ required minimum distributions would have been based on their account balances at the end of 2019, when the amounts were generally much higher than they are now. A similar one-year waiver was offered after the 2008 financial crisis.
U.S. individual retirement accounts, 401(k)s and other defined contribution plans held almost $20 trillion in assets at the end of 2019, according to the Investment Company Institute. Those totals almost certainly have dropped since then as global stock markets tumbled.
While tapping one’s 401(k) may be a necessity, Levinson said people should view it as a last resort. “Don’t mortgage your future if you have other options,” he said.
He thinks the $100,000 loan amount allowed is too high, and that people may jump at that number and later regret taking out that much.
Americans ages 25 to 55 pull about $69 billion per year from retirement accounts, according to a U.S. Government Accountability Office report issued last year.
The $2 trillion package was approved by the Senate late Wednesday and passed by House on Friday. President Donald Trump quickly signed the bill into law.
More coronavirus coverage from Fortune:
—401(k) no-penalty withdrawals: Everything you need to know
—What does furlough mean? Everything you need to know about work furloughs amid coronavirus
—USPS might have to shutter by June after relief bill provided no new funding
—17 companies that are hiring during the coronavirus crisis
—Everything you need to know about stimulus checks
—The quickest way to boost the economy isn’t even being considered. Why?
—Close to retirement and panicking? How to avoid locking in losses
—What comes after a bear market? You will like the answer
—What to do if you’re worried about getting laid off
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Before becoming involved in the real estate industry, Martha spent 17 years as a Flight Attendant She is also fluent in Spanish. As do most Austinites, Martha appreciates the live music venues, active lifestyle and family atmosphere Austin provides.
Since 2005 she has served the real estate industry as a REALTOR sharing her experience working with both buyers and sellers, allowing her to draw on her strengths and expertise in analyzing and strategizing to help her clients achieve their goals. She prides herself in providing every seller and buyer the knowledge that they have a loyal partner looking out for their best interest and is committed to serving her clients with the highest ethical standards and professionalism. She takes great pride in doing an excellent job and going above and beyond the call of duty. Her strong work ethic, honesty, positive and energetic attitude has allowed Martha to succeed in her professional life.
MARTHA OLMOS, ABR®, CNE®, GRI®
Austin, TX 78759