The coronavirus pandemic has affected personal finances just as much as personal health. With lockdowns and shelter-at home orders in place, many businesses have been forced to shut down.
And with that decline comes the ballooning number of people who lost their jobs.
Even though we’re all affected, the people who need help more are workers who are past 55 years old. They just simply have no time to recover nor wait for their investment values to jump back up; especially that more people are close to retiring or are forced to retire. To save their retirement, the next Federal stimulus program should have these policies.
UNEMPLOYMENT BENEFITS EXPANSION AND MEDICARE EXTENSION
In the coming months, it is estimated that the jobless rate in the U.S. could rise to as high as 30%. This could mean around 12 million older workers will be losing their jobs. They are likely to stay unemployed or will get back up but will earn 20% less than what they previously received. As a form of support for them, unemployment benefits for workers above 55 years old should be raised on top of the $600 they receive.
INCREASE IN SOCIAL SECURITY BENEFITS BY $200 PER MONTH
Beyond the $1,200 checks, there was no help given to the seniors for the first three stimulus packages. Many senior workers have nothing but Social Security to depend on because employers don’t have to provide them with a pension plan.
They can already get reliable and necessary retirement income from Social Security, but the benefits should be increased on a permanent basis to help lower elder poverty. For starters, policymakers can put up the Social Security “Catch-Up Contributions”. It is a program that automatically increases a worker’s contribution by $3.1% by the time they reach 50. This would increase the monthly benefits.
COMPANIES THAT DON’T CONTRIBUTE TO WORKERS’ RETIREMENT
The country’s retirement system expects employers to sponsor their workers’ retirement plans through traditional pensions or retirement savings accounts like 401(k)s. Some employers voluntarily provide retirement coverages, while others don’t But with the economic crisis, there might be more companies doing the latter. Federal support for private companies should be given to those who dutifully fulfill their commitments.
REVERSE THE POLICY ALLOWING PENALTY-FREE 401(K) WITHDRAWALS
Part of the terms of The Coronavirus Aid, Relief, and Economic Security (CARES) Act was to suspend financial penalties that workers get when they withdraw from their 401(k) and IRA accounts. This might be a good thing because it helps protect the retirement plans from getting depleted because of short-term needs. However, instead of encouraging people to sacrifice their future selves, they should find other ways to help them pay their bills now.