Broker Check

Stimulus Bill-How it works and What To Do With It

| March 26, 2020

The Senate passed their stimulus bill Wednesday night 96-0, and the House will vote on it Friday morning with Trump likely signing it Friday afternoon. Here is what we know so far and we will update if we see anything change.  


A stimulus payment of up to $1200 for individuals and $2400 for couples will be distributed in the coming weeks. The time frame is to be determined but it sounds like 3-7 weeks. The chances to be at the earlier end of that spectrum are better if you have a bank on file with the IRS. If you pay your taxes or receive tax return money via direct deposit, you will likely get yours first. It would be essential to check and make sure the account that you have used in the past is still open and active. There will also be an additional $500 per child under the age of 17. 


The income qualifications for the stimulus payment will be full up to $75,000 of annual income and will phase out until $99,000. Anything over that will not be eligible for payments. Those numbers double for couples. It will be based on your 2019 income if you have already filed your taxes. If not, it will be based on the 2018 income. All that considered, with the tax deadline delayed back 90 days, it could be in your benefit to wait (or hurry) if one year falls below those income numbers and the other doesn't. 


Other stimulus proposed details…

  • Student loan debt payments will be suspended through Sept. 30 without penalty or accrued interest. 
  • The REAL ID deadline for travel is postponed until at least 2021
  • Unemployment benefits could be as much as $600 additional per week on top of regular state benefits.
  • For businesses, it appears there will be a forgivable loan program to support those businesses forced to shut down or see significant drops in revenue. 



So now if you know you are going to get some money. What should you do with it? We believe it falls into three categories.


  1. You need it
  2. You could use it
  3. You don't need it


If you need it


If your income is negatively affected by what is going on, this money is for you. Use it to pay your bills, provide for your family, and take care of the necessities. Some places are offering a delay of payments, so take advantage of opportunities but use that money to build an emergency fund for possible needs that might pop up. Keep an envelope with some cash in it for something special like rental of a movie or some ice cream as this is a stressful time, and you need some time to unwind. 


If you could use it.


Fill it UP: 

If you don't have an emergency fund, start one. If you have one, add to it. The goal is to have six months of expenses in a place you can get if you need it. Work to that number in case this goes longer than you or your employer planned. 


Lower it DOWN

If you have some debt, use this money to help get that car, credit card, or house loan paid off a bit sooner. 


Fill it UP

Use it to fill up your Roth IRA or Traditional IRA, and with the delay of the Tax Date, you have more time (and now more money) to fill it up for last year. 



YOU Don't Need it.


Many of you have already taken the steps highlighted above, and this is your chance to Pay it Forward. Use the money to help those that need it the most. 


Charities are going to struggle through this time as more people need their help and donations slow.  


Community-People in our community are going to be worse off because of what is going on. Be generous with your tipping or supporting local businesses. Buy something you may not need; get some gift certificates you can give away or know you will use later.  


Family- Be giving in creative ways to help those around you. Challenge your kids or grandkids to read a book for a reward. Play a game of Let's Make a Deal, and the first person to call you back with a specific item in their house wins one of those gift cards from above. 


Invest in a Company- Whether that company trades publicly or if it's a local business on hard times. See if you can find a story, product, or company you believe in and participate in the potential growth with them.


Plan that Vacation- Visit a site like or call your local travel agent and start planning that getaway. 


We will leave you with one final thought. In times like these, it is important to make decisions and focus on things we can control. How long the coronavirus will linger, what it will do to our economy, our jobs, the stock market, are all items that are variable at this point.


Spending time with family, using government aid in a manner that makes sense for you, taking advantage of a low stock market, and reviewing retirement income plans are all things we have direct control over. Don't hesitate to reach out on any situation that may arise for some reassurance about what you are doing. 


We hope to see everyone sooner than later. Stay healthy. 



This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. The information is based on data gathered from what we believe are reliable sources. It is not guaranteed by LPL Financial as to the accuracy and is not intended to be used as the basis for any investment decisions. The information presented does not constitute a solicitation for the purchase or sale of any security and is not a recommendation of any kind. Please consult your financial advisor before making financial decisions.