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Amanda Blankenship

Changes in Law During the Coronavirus to Help People Nearing Retirement

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Changes in law during the coronavirus

The outbreak of COVID-19 across the globe has impacted the stock market, employment rates, and people’s everyday lives in a huge way. Millions of Americans watched their nest eggs disappear. For those nearing retirement, it is enough to send you into a panic. Thankfully, government officials are proposing changes in law during the coronavirus outbreak to help.

Changes in Law During the Coronavirus to Help People

As the virus swept across the world, the stock market collapsed. Because many retirement accounts rely on investments, people watched their savings for their golden years dwindle down to nothing.

Additionally, individuals who have been laid off during this time no longer have an income to contribute to their retirement. There is good news though. Officials are putting some changes in law into place to help.

1. RMDs Will Be Put on Hold

Required minimum distribution (RMD) refers to the minimum amount an investor must withdraw from their account after reaching age 72. This is common with many 401(k) and IRA plans. If you do not take the minimum, a fine will be placed on your account. However, during the coronavirus outbreak, the government has put a hold on minimum required withdrawals.

This will be the case for the entire year. Ed Slott, a certified public accountant, said: “Now, clients can sit out a year and avoid the tax bill on their 2020 RMDs if they wish.”

2. Penalties Are Being Eased

Individuals with IRAs and 401(k) accounts that have been financially impacted by the virus are also able to withdraw up to $100,000 from their retirement account without penalty. Typically if an accountholder withdraws early, they are required to pay a 10% early withdrawal fee.

It is important to note that this only applies to people who have been diagnosed with the coronavirus, been laid off due to the virus, had reduced work hours, or have otherwise been impacted.

3. You Can Get Larger 401(K) Loans

As mentioned in the point above, people with 401(k) accounts are able to take $100,000 out without a penalty. This is more than the typical $50,000 limit for 401(k) loans.

Other retirement plans will only allow you to take out up to a percentage of your balance. These limits will also be lifted for the rest of 2020.

Other Changes in Law and Policy

Policymakers are also pushing to make other changes to help Americans get through this time financially. For instance, Navient, a major federal student loan lender, has waived all interest and allowed borrowers to be granted forbearance until September. This means no payments will be required during this time.

On top of that, many mortgage companies and other businesses are offering payment relief at this time to assist people through the coronavirus outbreak. If you need assistance or are unable to make a payment at this time, the best thing to do is give the company a call and ask what your options are.

Readers, what do you think about the changes in law during the coronavirus outbreak? Are they helping you in any way?

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What You Need to Know About the Proposed Student Debt Relief Act

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Democrats have proposed a Student Debt Relief Act that would forgive $30,000 in student loan debt for borrowers during the coronavirus outbreak. This comes just two weeks after President Donald Trump announced student loan interest would be waived during the pandemic.

For the most part, liberals have been pushing for student loan forgiveness. In fact, it is one of Senator Bernie Sanders’ main talking points in his campaign. However, politicians are now saying the coronavirus outbreak and resulting economic downfall may require student debt cancellation to improve the economy.

What is the Student Debt Relief Act?

Of course, no Student Debt Relief Act has been pass… yet. There are about a dozen members of Congress backing the idea though.

“During this public health emergency, no person should have to choose between paying their student loan payment, putting food on the table or keeping themselves and their families safe and healthy,” lawmakers wrote.

More congressmen and women are looking to support this movement, but many of them cannot agree as to how much should be forgiven. Senators Chuck Schumer, Elizabeth Warren, and former vice president Joe Biden have proposed to automatically forgive $10,000 in debt for everyone.

This would mean for someone like me who owes $24,000, my debt would get knocked down to $14,000. That’s a pretty great deal! Others have proposed to forgive even more.

One thing is for sure. There are likely going to be changes to the federal student debt and forgiveness is likely going to extend to more people in the near future.

Other Help Coming

As mentioned, there have already been moves made to lessen the burden on student loan borrowers during the COVID-19 pandemic. First, interest on all federal student loans has been waived for the next 60 days. This is good news for individuals who have to apply for forbearance during this time. You won’t accrue interest while you’re not making payments (like you normally would).

Additionally, Congress has approved a stimulus for the coronavirus outbreak. Because many people are out of work, they are able to apply for these stimulus checks with their 2018 or 2019 tax returns. Each person will receive $1,200 and couples will receive up to $2,400.

Lastly, if you need help paying any of your other bills, you have options. Call your lenders, utility companies, and other businesses you deal with and explain your situation. Most places will work with you on payments right now.

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How to Pay the Bills During the Coronavirus Pandemic

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As the coronavirus spreads across the United States and cases increase by the day, more people are getting laid off from their jobs. Some businesses are closing due to government restrictions in the area. For instance, many cities have restricted all dine-in business for restaurants. Because of this, many people are without work and are left wondering how to pay the bills during this crisis.

How to Pay the Bills During a Pandemic

It is not yet clear what the stimulus package in the U.S. will look like to help the American people, and the economy, recover from this. If you are looking for immediate relief or help, the following tips will help you figure out how to pay the bills or make arrangements for your finances.

  1. Contact your mortgage lender. You may be eligible for a reduced mortgage payment or a complete pause on your payments altogether. Call your lender and discuss what options may be available to you. Important: Do not wait until you start missing payments to call.
  2. Apply for forbearance or deferment on your student loans. Many student loan borrowers saw Trump’s announcement that he would waive all interest on student loans during the crisis. That doesn’t mean you don’t need to still make payments though. If you’re having trouble making payments, you can apply for deferment or forbearance for your loan. Read more here.
  3. Call your utility companies. Yes, even your electric, water, gas, etc. will be able to work with you on payments at this time. If you are out of work and really hard-up for money, many of these companies will allow you to make partial payments, if needed. You may also qualify for free or reduced utility prices based on your income.

Lastly, many businesses and large corporations are putting a pause on any action they may typically take against delinquent accounts. For instance, Bank of America has paused all of its evictions, foreclosures, and repossessions until after the coronavirus pandemic has calmed down. That being said, you still should call and discuss your options with the lender/company.

Conclusion: Communication is Key

We, as a nation and as human beings, are all going through this together. Remember if you are calling a customer service line that they are likely dealing with high call volumes, not to mention their work environments have likely changed as well. Communication and kindness will go a long way during this time.

Lastly, if you find yourself out of work at this time, consider looking for a side hustle or another way to generate income during this time. We’ve compiled a list of 38 ways to make money on the side here.

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How to Practice Self-Care During Times of Crisis

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There is no doubt the world has been rocked by the coronavirus. Widespread panic and a flimsy economy are enough to make anyone develop anxiety. Not to mention, the federal government is suggesting weeks, possibly months, of social distancing. To keep yourself from going stir-crazy, you need to know how you can still practice self-care during times of crisis.

Practicing Self-Care During Times of Crisis is Important

Believe it or not, continuing to practice self-care during social distancing and other times of crisis is extremely important to maintaining your health. Even though you aren’t able to do the same things you’d normally be doing throughout the day, you can still take care of yourself.

Self-care during times of crisis includes things like focusing on eating well, exercising, staying in contact with others, and doing things you enjoy. Incorporating that into your time away from others can be key to keeping up your physical and mental health.

What Can You Do During Social Distancing?

Now, you’re probably thinking, “Amanda, the gyms and restaurants around me are closed. I’m not supposed to hang out with people and I’m stuck inside.” Well, thankfully, there are still a few self-care practices you can do at home. Here are just a few to employ while you’re distancing yourself…

  1. Get active! Even though the gym is closed, you can still try and stay active. Do at-home workout videos or yoga. It is also safe to go on a walk (or run) as long as you won’t be walking on a heavily-populated street and are in good health.
  2. Read (or listen to) a book. While you’re at home, this is the perfect time to catch up on some reading. If you’re not big on reading, Amazon has a plethora of books on Audible.
  3. Find things that make you laugh and smile. Stuff is scary right now. During times of crisis, try and find something that will pick your spirits up (Netflix has a ton of good standup specials).
  4. Cross some things off your DIY to-do list. Why not use this time to improve your living space? You’ll be surprised how much decluttering and cleaning your home can help clear your mind.
  5. Check-in with yourself and others. You need to be more self-aware during this time. Times of crisis can be emotionally overwhelming and, before you know it, you could be headed towards a breakdown or a bout of depression. Be sure you know what balance you need to keep a level head during this time. Additionally, it may be a good idea to start checking in with friends and family via video chat to help you feel less socially isolated.

Maintain Your Self-Worth

Lastly, it is so important to maintain your self-worth during times of crisis. Right now, with COVID-19 spreading across the globe, many people have been laid-off. Being unemployed can contribute to feelings of decreased self-worth.

Just remember, this is only temporary. The best thing you can do is practice self-care and focus on maintaining your own personal health (mentally and physically) at this time.

Readers, how do you practice self-care during these times?

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What You Need to Know About the Trump Student Loan Interest Waiver

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Trump student loan interest waiver

President Trump announced the United States government would waive federal student loan interest amidst the coronavirus outbreak. Because many people are being forced to stay at home, not work, or work less, many people will need this break financially. However, the Trump student loan interest waiver doesn’t mean what you think it does.

So, What Does It Mean?

Friday afternoon Trump announced he would like to waive interest on student loans during the coronavirus outbreak. For those out of work, it sounds like great news, but it doesn’t mean you don’t have to make your payment.

When Trump announced this change, the Department of Education immediately went to the drawing board to figure out how this will work. They came up with this…

Your same payment will be due but the full amount will go to the principal and none of it will be going towards the interest. At this time, no interest will be applied to your account. This will give short-term relief to borrowers during the outbreak.

Other Options

Individuals who aren’t working at this time may need to pause their payments while they are out of work or until they get back on their feet. For these borrowers, you have a few options.

  • Income-Driven Payments: If your income is changing or you need to make a smaller payment, call your loan provider and discuss your options. Many of them will decrease the amount you have to pay based on your monthly salary.
  • Deferment: Deferment will give you a break from making payments on your student loans and you won’t be responsible for any interest accrued on subsidized loans during this time. There is a short list of reasons you might be granted deferment, including unemployment, cancer treatment, economic hardship, education, military duty, or rehab.
  • Forbearance: Similar to deferment, forbearance will give you a break from paying your student loans. However, you will be responsible for any and all interest during this time. You don’t have to have specific reasons why you are applying for forbearance.

People looking for deferment or forbearance will not have to make payments for a determined period of time. Typically, your loans would continue accruing interest during this time. With President Trump’s proposal, people needing a break from payments won’t have any interest added to their accounts.

However, it is a good idea if you can keep up your student loan payments at this time to do so. Don’t take the interest-free period to take a break from paying off your loan. In fact, paying on it now can actually benefit you.

Questions About The Waiver

So far, there are still a lot of unanswered questions surrounding the Trump student loan interest waiver, including some the Department of Education can’t answer. For instance, will the interest being waived now be added on later? DOE officials don’t yet have an answer to this.

Also, it isn’t yet clear as to whether or not federal PLUS loans will be covered under the waiver. This includes parent PLUS loans and graduate education loans.

All in all, the changes that need to happen for this waiver to take effect will be difficult for loan providers to implement in such a short period of time. Not to mention, some of these service providers will need to send their call center employees home to decrease the risk of contracting coronavirus. So, if you are looking to contact your provider about this, be patient.

The Trump Student Loan Interest Waiver Can Benefit You

Although you will still have to make payments on your loans, the Trump student loan interest waiver can help you if you aren’t in need of forbearance or deferment. Actually, you can take a good chunk off the amount you borrowed and shorten the amount of time you’ll be paying it back.

This waiver will be available to more than 35 million borrowers who have received a federal student loan. Private lenders, like Sallie Mae, will not be covered under the waiver.

Lastly, if you are wondering about what you need to do to benefit from the interest waiver, it’s nothing! You don’t have to contact your loan provider. The interest will automatically be waived during this time and will be retroactive to Friday when Trump announced the change.

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Coronavirus Means Working From Home For More People

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As new cases of coronavirus become known in the United States, more people are taking extra steps to stay healthy. For the most part, this means avoiding crowds and washing your hands more. However, some workplaces are also transitioning into virtual offices amid the coronavirus scare as well. This means working from home for more people.

Why Workplaces Are Transitioning

Workplaces are transitioning into virtual offices for obvious reasons, such as limiting direct contact with people to prevent the spread of the virus. There are some other reasons employers are considering moving to home offices.

Many schools are also moving to online classes while the coronavirus scare is at its peak. For working parents, kids transitioning into virtual classrooms may also mean they have to stay home and move to a virtual office.

Not to mention, allowing your workers to do their day’s work from home will help limit the possibility of someone in the office getting coronavirus. If you’ve seen any of the other facilities where the virus has been reported, you know this is huge. The cost of paying for the decontamination of your office could level a small business expense wise.

How This May Impact Business

For small business owners, the biggest way this may impact day-to-day business is the transition period for employees to get used to working virtually. At first, some productivity will be lost.

Businesses that have always been brick-and-mortar may also need to re-train some employees on best practices in the virtual office. There may also be some initial cost on the business’ (or employee’s) part to get a home office set up. Not to worry though – those costs will be tax-deductible.

Having some staff members work from home may also initially limit the business dealings you’re capable of handling. However, a huge percentage of the workforce already works part of the week (if not the entire thing) from home anyway. So, you’ll likely be able to find a workaround for those tasks.

Readers, what are your thoughts about workplaces switching focus to virtual offices during the coronavirus scare?

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