The Senate has passed an economic stimulus package valued at approximately $2 trillion, representing the legislative branch of the federal government’s first big response to the ongoing coronavirus crisis.
Given the size and scope of the package, it will take some time for the full relief picture to emerge, and as of Thursday morning, the House of Representatives still had to approve the measure. It must then be signed by President Donald Trump, a move expected as soon as Thursday afternoon.
The text of the legislation, which has the short title “CARES Act,” at this stage includes provisions that would permit limited early withdrawals and higher loan amounts from retirement accounts to ease financial pressures faced by workers who have lost jobs, who contract the virus or must stay at home to care for loved ones afflicted by the virus.
Wayne Chopus, president and CEO of the Insured Retirement Institute (IRI) and a close follower of the happenings in Washington, says the stimulus package includes many other forms of much-needed economic assistance that will hopefully help to blunt the impact on workers’ retirement planning success.
“This latest, massive effort to help our nation’s medical professionals and first responders treat those who contract the COVID-19 virus represents much needed critical care for our nation as a whole,” Chopus adds. He says the IRI and its peer organizations support provisions in the legislation to provide flexibility to retirees whose retirement savings may have been hit hard by the steep drop in the stock market.
Other provisions detailed in the stimulus legislation would waive required minimum distributions (RMDs) when there has not been enough time to recover losses from retirement accounts prior to the point at which the RMDs would be drawn. Other provisions would allow for targeted access to retirement accounts for those hit hardest by the health crisis.
“Our nation and the world are fighting the most serious health crisis in a century,” Chopus says, echoing the speeches Senators gave on Capitol Hill as they debated and passed the CARES Act. “Congress and the president have taken a major step toward providing the resources to medical providers to treat those who become ill as well as the economic support for workers and businesses to help ensure that jobs put on hold today will be back tomorrow when we defeat this virus.”
Beyond the action in Congress, news has emerged that jobless claims surged to a record 3.28 million last week—outstripping by several times the worst weeks of the Great Recession.