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10’s of millions have lost their job throughout the corona crisis so far. As the Payroll Protection Program winds down in the next few weeks, there is concern a second fresh wave of layoffs will occur for businesses who have gone through the money they were given. Joining the newscast to talk about what can be done for those who may anticipate losing their job soon is Jordan Schwartz, financial planning advisor of Strategic Wealth Designers.
Schwartz says it’s not fun to think about being laid off but the reality is it’s possible in the unprecedented economic state the United States is in right now. “Make sure you have as much in reserves as you possibly can, I like to see folks have 6 to 12 months in cash of their monthly expenses saved and available to them. I realize that isn’t always possible but it’s definitely ideal to have that saved.”
Amidst the crisis, the government has allowed people under the age of 59.5 to go ahead and with draw money from the retirement accounts like 401K’s or 403B’s to help bridge some of the gap to pay for expenses that they normally were keeping back for their retirement plan. Schwartz says he isn’t a fan of pulling money out of your retirement plan unless you absolutely have to. “Normally there would be penalties for withdrawing money from your retirement accounts prior to 59.5, and while the government will let you dip into your 401K now, I’d make it a last resort option not a first option for yourself.”
Typically, it can be very difficult for people to get the money back into those retirement accounts once they have taken it out, often retirement savings that they accumulated over a great length of time, they aren’t able to just restore whole again after a rough patch which can ultimately set them back in their future financial goals.
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