The new Federal stimulus package, or CARES Act, provides many Americans with much-needed relief from the COVID-19 pandemic. In addition to giving people additional funds to weather the financial storm that COVID-19 has caused, the stimulus provides tax relief for retirement savers and retirees.
Unfortunately, it has also provided a ripe opportunity for fraudsters to take advantage of unwitting victims.
Here are some steps you can take to use the CARES Act to your benefit while protecting your finances now and in the future.
Use the Federal CARES Act to Your Benefit
The recently announced CARES Act is intended to help Americans navigate the financial impacts of COVID-19. If you are expecting to receive a Federal stimulus check, consider saving it or using the money toward groceries and other necessities instead of making a large purchase.
The CARES Act also includes provisions for retirees and retirement savings account holders. Retirees are normally required to take out a minimum lump sum, or Required Minimum Distribution (RMD), every year from their retirement accounts. Under the new stimulus package, that requirement is waived for 2020.
The law also waives the 10% tax for withdrawals from retirement plans for amounts up to $100,000. The withdrawal counts as a loan and you can also avoid paying taxes on it if you repay the loan within three years.
Of course, if you do not need the funds it is best to leave them in your investment accounts.
Beware of New Fraud Tactics
One of the most distressing new tactics reportedly being used by fraudsters is using the upcoming stimulus checks for individuals and families as a vehicle for identity theft. They are posing as Federal employees and asking consumers for their social security numbers and other identifying information.
They claim that if the victim does not provide this information, they will not get a check. This is a scam. The Federal Trade Commission has provided tips to avoid this scam and clearly states that “the government will not call to ask for your Social Security number, bank account, or credit card number. Anyone who does is a scammer.”
Similar scams are already being perpetrated by fraudsters, including suspended social security numbers and online offers for home COVID-19 test kits. For real time updates and about current COVID-19 scams, visit https://www.consumer.ftc.gov/features/coronavirus-scams-what-ftc-doing.
Keep Your Money in a Safe Place
No, under your mattress or in a coffee can in your basement is not the safest place for your money. The safest place to keep money is your FDIC-insured bank account. COVID restricted everyday life and while some people reacted by going to their banks to withdraw cash, it is not recommended. The health and strength of the banking industry is sound.
While having some cash on-hand is smart, there is no need to take thousands of dollars out of your bank account. The FDIC insures consumer checking, savings, money market and CD accounts up to $250,000, making your money much safer in your bank than hiding it in your home. Now is a great time for a virtual financial checkup with a banker or advisor.
If you need help with or have questions about managing your accounts, a WSFS Associate is ready to help; please call our local Contact Center from 7:00AM – 7:00PM, Monday – Friday, or 9:00AM – 3:00PM on Saturday and Sunday at 1.844.WESTAND.
For 24/7 access and availability, Customers can access online banking and the WSFS mobile app to view transactions, check balances, deposit checks and more. Customers can also send and receive person-to-person payments via Zelle® in the mobile app. They can access nearly 500 WSFS ATMs or visit one of our locations offering drive-thru service.
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