As a measure to tackle the economic effects of the coronavirus pandemic, lawmakers unanimously passed the Coronavirus Aid, Relief and Economic Security (CARES) Act on March 27th, 2020. The CARES Act is an economic stimulus meant to help “American workers and families, small businesses, and preserves jobs for American industries”. It also simplifies things for people who were eligible to start withdrawing funds from their retirement accounts, like 401(k) plans and IRAs.
If you had to use your retirement savings to counteract the economic effects of the pandemic, there’s no better time than the present to get your retirement funds back on track as soon as possible. Read on to find out what you can do to secure yourself a comfortable retirement, despite the COVID-19 crisis.
Focus on reducing your debt
If you were forced by financial necessities to dig into your retirement savings to pay for debts, take it as a valuable lesson learned. It’s time to be a little wiser and put your best efforts into paying off your debts such as student loans, medical expenses or credit card balances.
You could also try to pay off your existing mortgage and replace it with a newer, better one. A mortgage refinance can help you reduce your monthly payments, lower the total payment amount and even save some money in the process. 2020 is a perfect time to do this, given the historically low mortgage rates but rather stable real estate values.
Speaking of 2020, check out these 9 Ways to Be Financially Prepared for a Second COVID-19 Lockdown.