New Stimulus in the Pipeline – March 17, 2021
Last week the president signed the American Rescue Plan, which pumps another $1.9 trillion into the economy. That’s on top of the $900 billion passed in December and the $2.2 trillion CARES Act in March 2020.
What’s in the package? The highlights
- A stimulus check of $1,400 per person will be sent to most people, subject to income limits; dependents are also eligible.
- The child tax credit is raised to $3,000 and $3,600 for children under 6. As with the stimulus check, the credit is subject to income limits.
- There will be additional aid for health insurance, including COBRA support for terminated employees.
- An additional $300 per week in federal jobless benefits is extended into September.
- If you qualify for student loan forgiveness, you won’t pay income tax on the debt forgiven. This provision runs through 2025.
- There will also be additional aid to state and local governments, money for vaccine distribution, education, and more.
There will be no RMD relief, and the minimum wage will not rise.
Sources: WSJ, Kitces.com
Investor’s corner
The just-passed bill is complicated, and the details given above are simply a high-level summary. One thing that is certain, the government is pumping over $5 trillion into the economy over a very short period. It’s never been done before.
Will the economy overheat? Will inflation rise? Or will the plan work as advertised?
Financial planning is paramount in today’s environment. Plans are designed to reach your financial goals and manage possible risks. If you have a well-diversified holistic plan, congratulations. You have chosen the narrow path.
Created 2021-03-17 22:33:40