Ways to save and access money in the time of coronavirus
If you are experiencing financial distress during this challenging time, think about taking the steps below in order to help ease your financial burden.
See if you’re eligible for a stimulus check. For people who meet the requirements, the checks will provide:
- $1,200 for single filers.
- $2,400 for joint filers.
- $500 for each qualifying child.
Visit irs.gov for qualifications and details.
File for unemployment. If you are unemployed, file for unemployment and apply for COBRA if your former employer offers it. The Coronavirus Aid, Relief, and Economic Security (CARES) Act adds an additional $600 a week to whatever benefits your state provides.
Evaluate your subscriptions. Review services you are signed up for and cancel them if you no longer need them.
See if you can delay payments. Contact your phone, internet and utilities providers to ask for help paying your bills, delay payments or set up a payment plan.
Check your student loan options. The CARES Act provides different options depending on the type of loan you have. Contact your loan provider or go to studentaid.gov/announcements-events/coronavirus for more information.
Contact your loan providers. If you have a credit card balance, auto loan or mortgage, contact the provider to ask about your options.
Talk to your landlord. If you rent, contact your landlord to ask for deferred payments. Remind them that their bank may be able to defer their mortgage payments.
If you’re over 59½, tap into your retirement savings. If you’ve already used other forms of savings, consider withdrawing money from your retirement savings account.
Consider using your home equity. If you own a home and have equity in it, you could apply for a home equity line of credit or refinance and take cash out.
Think about a personal loan. Contact your bank or other personal loan provider to see if you can get a personal loan.
Borrow from your retirement savings account. If your plan allows and you qualify:
- You may be able to take a loan from your retirement savings account. If you qualify under the CARES Act, you will be eligible for an increased loan amount.
- You could consider taking a CARES Act withdrawal. Keep in mind the benefit of long-term investing possibilities.
- You may be eligible to take a traditional hardship withdrawal depending on your plan.
Comparing the ways to tap into your retirement savings
CARES Act withdrawal
(until December 31, 2020)
|CARES Act loan (until September 22, 2020)||Traditional hardship withdrawal|
|Maximum amount||$100,000||Lesser of $100,000 or 100% of vested account balance||Determined by plan and not to exceed documented financial need|
|IRS early withdrawal penalty||No, the 10% IRS early withdrawal penalty is waived||No||10% IRS early withdrawal penalty may apply|
|Taxes owed||Yes, but not at the time of withdrawal, and can be spread over 3 years||No||Yes|
|Distribution administration and loan origination fees||Waived by Empower||Waived by Empower||Waived by Empower|
|Repayment||Optional over 3 years||Yes, but the first payment is delayed for until 2021||No|
|Qualifications||Coronavirus-related qualified persons1||Coronavirus-related persons1||Must document need for hardship2|
Keep in mind: Taking a loan or withdrawing money from your retirement account early should be a last resort. We understand that sometimes unusual times call for unusual actions. Before making decisions about taking money out of your retirement savings, please discuss your options with a tax professional
Find more valuable information in the Empower Retirement Learning Center, including details on how taking a loan from your retirement account could impact your future.
Use the Borrowing from your retirement plan calculator or the Withdrawals before retirement calculator in the Learning Center to run the numbers for yourself:
- Visit the Learning Center.
- Click Calculators in the top right corner.
- Select Borrowing from your retirement plan or Withdrawals before retirement below Spending calculators.
1 To qualify for a CARES Act withdrawal or loan, you must be a person who has been diagnosed with COVID-19 by a test approved by the Centers for Disease Control and Prevention; a person with a spouse or dependent who has been diagnosed; or a person experiencing adverse financial consequences due to being furloughed, quarantined or laid off; having their paid work hours reduced; being unable to work due to lack of childcare; or having to close or scale back a business due to coronavirus.
2 To qualify for a traditional hardship withdrawal you need to provide documentation proving a need.
Securities offered and/or distributed by GWFS Equities, Inc., Member FINRA/SIPC. GWFS is an affiliate of Empower Retirement, LLC; Great-West Funds, Inc.; and registered investment adviser, Advised Assets Group, LLC. Investing involves risk, including possible loss of principal. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice.
©2020 Empower Retirement, LLC. All rights reserved. GEN-WCWB-WF-534520-0520 RO489916-0420
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