financial wellness Archives

Financial Impact of COVID-19 on Employees

by LizStevens | Jun 24, 2020 | Blog

Financial impact of COVID-19 on employees. Financial stress is high and employees are worried about healthcare costs, everyday expenses and how the pandemic will impact their retirement.

An astounding 10 percent of employees exhausted their emergency savings within the first two weeks of the pandemic, according to research by Edelman Financial Engines. Just one month into the crisis, almost a third of employees had depleted their emergency funds and stopped contributing to their retirement accounts.

“Large numbers of American workers are suffering financially, and their plight is likely to linger even after the economy begins to recover,” said Kelly O’Donnell, Executive Vice President at Edelman Financial Engines and head of the firm’s workplace business.

Financial Impact of COVID-19 on Employees

Retirement

Most employees (52 percent) are concerned about the value of their retirement savings or other investment accounts. More than 25 percent of workers have already dipped into their retirement or plan to do so soon, according to research by Bankrate. Another survey by TD Ameritrade found that over 70 percent of employees expect the pandemic to impact their senior years and more than 20 percent believe that impact will likely be severe.

Emergency Savings

Over 60 percent of employees wouldn’t be able to come up with $2,000 within 30 days for an emergency. Thirty percent would need to make sacrifices to come up with $2,000, 14 percent would have to do something drastic to raise the money and 10 percent wouldn’t be able to find the funds anywhere.

Debts and Everyday Expenses

More than half of mortgage loan and auto loan borrowers are concerned about making payments in the next few months and employees are increasingly turning to credit cards to cover everyday expenses like groceries and takeout.

Many lenders are offering some form of COVID-19 relief, most commonly forbearance, which allows employees to temporarily stop making payments on debts or make reduced payments for a certain period of time. It can alleviate some financial stress in the short term, but employees should keep in mind that the same amount of money is owed once forbearance ends and they may need to make additional payments to catch up.

According to research by Capital One and The Decision Lab, the more financially stressed employees are, the less likely they are to make smart decisions when it comes to spending and saving, which helps explain why nearly 70 percent of employees made an online purchase specifically to cope with the stress of the pandemic.

How Financial Wellness Programs Can Help Employees Get Back on Track

Nearly 40 percent of workers told Edelman Financial Engines that they could benefit from financial advice during the pandemic.

“Companies that give workers better access to financial advice can help alleviate their employees’ financial stress, leading to increased productivity, lower turnover and reduced absenteeism,” O’Donnell said.

Research by Bank of America found that 91 percent of employees who participate in financial wellness programs say those resources have helped them. And, 95 percent of employers who offer those programs agree that these support systems have been effective in reaching their company’s goals.

Financial wellness programs, like Best Money Moves, provide the guidance, tools, and support employees need to reduce their financial stress.

Best Money Moves has tools and features that help employees measure their financial stress, budget for monthly expenses, pay down debt and plan for emergencies. Employees can talk to trained professional financial counselors and educate themselves about everything from investing to co-signing loans to buying their first homes with access to a library of over 700 articles, videos and calculators.

Best Money Moves is also gamified, featuring a point-based rewards system where users earn points every time they log in, enter their information into their profile, work with their budgets, read articles and measure their stress. Each point translates into a chance to win a monthly contest.

If you want to learn more about how Best Money Moves can bring financial wellness to your company download our whitepapers and sign up for a demonstration here.

Coronavirus: Early Retirement Withdrawals and Savings by Generation

by LizStevens | May 27, 2020 | Blog

Coronavirus: early retirement withdrawals and savings by generation. New research examines how the COVID-19 pandemic has impacted retirement planning.

Initially, the coronavirus pandemic highlighted how unprepared people were for a financial disaster, putting a spotlight on the lack of emergency savings and an overreliance on credit cards. New research shows COVID-19 has also had a significant impact on long-term financial planning.

The majority of workers (52 percent) now expect to work past age 65 or don’t plan to retire at all, according to a new study by the Transamerica Center for Retirement Readiness. In light of the coronavirus pandemic, 23 percent of workers say their confidence in their ability to retire comfortably has declined.

“The long-term implications of the coronavirus pandemic and recession on retirement security have yet to be fully realized,” said Catherine Collinson, CEO and president of Transamerica Institute® and TCRS. “However, the financial vulnerabilities among workers across all generations are becoming clear.”

Coronavirus: Early Retirement Withdrawals and Savings by Generation

Millennials Retirement Withdrawals, Savings and Financial Stress

22 percent of Millennials have already taken out a loan and/or early withdrawal.
20 percent plan to take out a loan and/or early withdrawal.
Millennials have an estimated median of $23,000 saved for retirement.
26 percent of Millennials have student loan debt.
Millennials have saved an estimated median of $3,000 for emergencies.

Generation X Retirement Withdrawals, Savings and Financial Stress

15 percent of Gen Xers have already taken or plan to take out a loan and/or early withdrawal.
Gen Xers have an estimated median of $64,000 saved for retirement.
52 percent of Gen Xers have credit card debt.
Gen Xers have saved an estimated median of $5,000 for emergencies.

Baby Boomers Retirement Withdrawals, Savings and Financial Stress

10 percent of Baby Boomers have already taken or plan to take out a loan and/or early withdrawal.
Baby Boomers have an estimated $144,000 saved for retirement.
25 percent of Baby Boomers are debt-free.
Baby Boomers have saved an estimated $15,000 for emergencies.

“Although our research paints a sobering picture, it also surfaces some opportunities that can help mitigate the negative economic effects of the pandemic and improve retirement prospects,” Collinson said.

Providing financial wellness benefits, offering flexible work arrangements and on a larger scale, collaborative efforts with policymakers and industry leaders can increase awareness of relief programs like unemployment insurance and alert employees to potential alternatives to making early withdrawals from retirement accounts.

“Workers’ ability to achieve a secure retirement highly depends on a robust employment market, the availability of retirement, health, and welfare benefits, the preservation of safety nets such as Social Security and Medicare,” Collinson said. “Even amid the pandemic and current hardships, we are presented with an opportunity to come together to reimagine our world — including how we live, work, retire, and age with dignity.”

COVID-19: Forbearance and Debt Repayment Relief

by ryanwangman | Apr 30, 2020 | Blog

COVID-19: forbearance and debt repayment Relief. If you’ve lost income due to the coronavirus pandemic there may be options to temporarily reduce or stop loan repayments.

Millions of people across America are now facing unexpected financial difficulties due to the Coronavirus/COVID-19 pandemic, and many are finding it hard to stay on top of their bills, such as rent, utilities, cell phone service and student loans.

In the five weeks since the pandemic shutdown reached its full height in mid-March, more than 26 million Americans have applied for unemployment benefits. That number accounts for the significant number of people experiencing temporary or permanent unemployment.

If you are one of the many who have lost their jobs, been furloughed or experienced a pay cut due to the COVID-19 pandemic, you have a variety of debt repayment options available to you through your lenders and creditors. One option may be forbearance (also known as deferred payments), which is an agreement with a lender or credit allowing the borrower to postpone or stop loan payments for an agreed-upon duration of time.

Are My Debts Eligible for Forbearance? What Does It Mean If They Are?

When most people use the term “forbearance,” it’s often linked to home mortgages, but any lending agreement you’ve entered into may be eligible for deferred or suspended payments.

The drastic and sudden economic impact of the COVID-19 pandemic has led many creditors and lenders to offer special repayment options on a multitude of debts. This includes mortgage payments, student loans, auto loans, credit card balances, utilities, property taxes and small business loans, though this list is not all-encompassing.

Your lenders and creditors may agree to allow decreased or delayed payments for a specific time period up to 12 months, depending on the deal you strike with them. They might also offer to reduce the interest rate you’re being charged on your debt, though there are no federal guidelines outlining detailed terms for forbearance agreements, so your options may differ.

If You Need Specific Info on Eligibility for Your Debts, Talk to Your Lender or Creditor

For forbearance agreements during the COVID-19 pandemic, each lender and creditor has created their own programs and rules. Eligibility for those programs depends on your particular lender or creditor. To learn more about setting up forbearance or about the other options available to you, including options outside of forbearance, contact your lender or creditor directly.

Importantly, you cannot simply miss a payment and expect to be off scot-free without communicating with your lender about your situation. Your credit standing could be compromised unless you work out a deal with your lender before stopping payment.

Forbearance may help you deal with your short-term financial difficulties and assist you in getting back on your feet, but it doesn’t come without its drawbacks. If you enter into a forbearance agreement, you’re not getting a gift or “free money. You may still need to repay interest that accrues during your approved deferral period, and late fees might still apply, depending on your agreement with your lender or creditor. Ask them directly if you have more questions on how and when any fees may be applied, and how they will report your forbearance agreement to the nationwide credit reporting agencies.

How Do Forbearance or Deferred Payments Work for Different Types of Debts?

If you’re currently facing financial hardship due to a layoff, furlough or pay cut, reach out to your lender or credit to learn more about their options for debt repayment programs and whether you’re eligible. The following details some of the special forbearance arrangements that have been prescribed by the Coronavirus Aid, Relief, and Economic Security (CARES) Act for different scenarios you may be facing now:

Mortgages

Fortunately for people who are struggling to keep up with mortgage payments, federal officials have announced a temporary nationwide halt to foreclosures and evictions for federally-backed mortgages. People who have suffered a loss of income due to the COVID-19 pandemic can qualify to reduce or suspend payments for up to 180 days, with specifics depending on their particular situation.

Borrowers whose mortgage loans are backed by Fannie Mae or Freddie Mac, which underpin the majority of loans in the United States, or by the U.S. Department of Veterans Affairs (VA), the Federal Housing Administration (FHA) or the USDA are eligible for help, including options for forbearance and delayed payments. You must contact your loan servicer to request this forbearance.

To combat ongoing misinformation, the Federal Housing Finance Agency reiterated at the end of April that borrowers in forbearance with a federally-backed mortgage are not required to repay the missed payments in one lump sum. Your mortgage servicer will contact you about 30-days before the end of the forbearance plan to see if the financial hardship has been resolved and discuss your repayment options.

You can search for your loan on the FannieMae.com and FreddieMac.com websites to determine whether one of them has purchased your loan from your original lender or call your mortgage servicer directly. In addition, Fannie Mae and Freddie Mac have halted foreclosures and evictions during the Coronavirus/COVID-19 pandemic, so visit their websites for regularly updated information on how to get relief.

If your loan is not federally backed, you will have to call your mortgage servicer to find out whether they offer any COVID-19 pandemic relief. Review your monthly statement or visit your mortgage servicer’s website for information on how to contact a customer service agent.

If you’re a homeowner who doesn’t know what company backs your mortgage, you can find more information about the federal foreclosure and eviction moratorium and related Coronavirus/COVID-19 actions on the U.S. Department of Housing and Urban Development website.

Student Loans

For most federally held student loans, payments and interest are automatically suspended through September 30, 2020, though that date may be extended with additional legislation. You do not need to take any action for this to take effect.

However, some student loans do not qualify for this benefit, including loans under the Federal Family Education Loan (FFEL) Program, private student loans that are owned by commercial lenders and some Perkins Loans that are held by the institution you attended. To request a forbearance agreement or delayed payments on these loans, contact your loan servicer.

(And remember: If you find yourself with additional cash and are able to continue making your payments, even though none are required for the time being, you’ll chip away at your debt and better position yourself for financial security after the COVID-19 pandemic is behind us.)

Auto Loans

A significant number of auto lenders are offering forbearance agreements or deferred payment plans during the pandemic. This includes options for existing customers as well as those looking to purchase a new vehicle. Contact your lender or automobile manufacturer to learn more about their specific deals.

Credit Cards

Every credit card company has different options and eligibility requirements for forbearance or payment deferrals on your credit card debt. Some may allow you to defer payments while interest continues to accrue over a set period of time, while others may offer to reduce your interest rate or principal payments temporarily. Go to your credit card issuer’s website to learn what options are available and what you have to do to get help. Even if your credit card company isn’t offering a plan that works for you today, it might add new options in the near future, so check back frequently for updates.

Utilities and Property Taxes

Many cities and states across America are offering relief options for utility bills and property taxes to those impacted by the COVID-19 pandemic. This may include forbearance or deferred payments. Call your local municipality or utility provider for details.

Small Business Loans

The federal government has committed a significant amount of disaster relief money to small business owners who have been impacted by the COVID-19 pandemic. The original CARES Act included a provision called the Paycheck Protection Program, which provided small business loans that are fully forgivable in many circumstances, making the money similar to a grant. Businesses have to apply for the loan, which was designed to cover about two months of payroll expenses. Although the initial tranche of money has run out, Congress recently passed another bill with hundreds of billions of dollars in additional funding for small business loans.

If you are a struggling business owner, the Paycheck Protection Program may give you an alternative to requesting forbearance or deferred payments, and buy you some time to get back on your feet. Read more about small business relief options at the U.S. Small Business Administration website.

This information may change as the COVID-19 pandemic evolves, and we’ll continue to provide up to date information as it does.

How Soon Will I Get My Stimulus Check?

by ryanwangman | Apr 17, 2020 | Blog

How soon will I get my stimulus check? How the IRS plans to send out stimulus checks from the CARES Act and when you can expect to get yours.

Much of the American economy has moved online as the country makes an effort to curb the spread of the Coronavirus/COVID-19 pandemic, and the abrupt shift to the internet has left millions of people either unemployed or forced to adjust to an unfamiliar normal. Fortunately, the federal government recently passed legislation that will send some short-term financial relief to those in need.

As a result of the $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed in late March by Congress, a majority of adults across the country will receive a one-time stimulus check of $1,200, though the exact amount depends on a person’s income. Married couples without kids making below a specific amount will get a total of $2,400, and those with kids will receive an extra $500 for every eligible child age 16 or under. To get a check, you do not need to apply.

Now that the legislation has passed and the government is gearing up to turn this program from a hypothetical into a reality, the main thing people want to know: How soon will I get my money? The quick answer — it’s complicated.

How Soon Will I Get My Stimulus Check?

What You Need to Qualify for a Coronavirus/COVID-19 $1,200 Check

Before we detail when your check from the Internal Revenue Service will arrive, you need to understand how much you’ll be receiving, if any at all.

The IRS will determine if you’re qualified for the check by using your 2019 tax return. If you have yet to complete your 2019 taxes, the I.R.S. will use your 2018 return. If you have yet to file that, you can give the agency a 2019 Social Security statement showing your income.

You will receive the full $1,200 amount if you are a single adult with a Social Security number and your income is $75,000 or less. The threshold to receive the full $2,400 for married couples filing joint returns is $150,000. In addition to the $2,400, married couples will also receive $500 for every eligible child.

The stimulus check is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. If you are a single filer making over $99,000 or a joint filer with an income exceeding $198,000, you are not qualified for a stimulus check.

Unfortunately, if you are claimed by your parents as a dependent (which includes many high-school and college-aged people), you are also ineligible for a stimulus payment.

How Soon Will You Receive Your $1,200?

The exact date you’ll receive your check depends on your situation, but the IRS has already started to send electronic payments to millions of people across the country.

How quickly you’ll get that money primarily depends on how you filed your taxes. Electronic payments can be quickly sent out by the IRS, but other methods require the agency to print and distribute paper checks, which adds extra time to the process.

To find information about your specific check, the IRS has released an online tool enabling you to track exactly when you’ll get it. To track your stimulus check, you’ll have to input your social security number, your birthday, your address and your zip code — provided you filed your 2019 or 2018 tax return. If you are a qualified non-filer, there are extra links on the IRS’s website to input your information so you can still get your money.

On April 2, Treasury Secretary Steve Mnuchin said qualified Americans who have signed up for direct deposit payments should get them within two weeks, a process which is currently ongoing. A spokesperson for the Treasury Department expects 50 million to 70 million Americans to get their money via direct deposit by April 15, according to The Washington Post.

What If I Didn’t Sign Up for Direct Deposit?

However, if you need a paper check and didn’t sign up for direct deposit, you might have to wait for a bit. $30 million in paper checks for millions of people across the country won’t begin being distributed until April 24 or longer because the government doesn’t have their banking information.

Paper checks will reportedly be sent to lowest-income Americans first, beginning on April 24 with individual taxpayers that make $10,000 or less, per to an internal IRS plan obtained by The Washington Post. After that, checks will be sent to people earning $20,000 or less, sent in the mail May 1, followed by stimulus payments for people with incomes of $30,000 on May 8, $40,000 on May 15, and continuing in increments of $10,000 weekly.

Under the proposal, this process will keep going until paper checks are sent out on Sept. 4 to joint taxpayers making the maximum that are still qualified for a stimulus payment. All other paper checks will be sent out on Sept. 11, primarily to those the I.R.S. did not have prior tax information about. The IRS plans to distribute roughly 5 million checks each week.

For more information on your specific situation, please visit the IRS’s coronavirus stimulus payment resource center, linked here. We will update this article as the situation evolves and the payment process begins.

Coronavirus: Financial Stress Statistics 2020

by LizStevens | Apr 15, 2020 | Blog

Coronavirus: financial stress statistics 2020. Recent research focuses on how COVID-19 has negatively impacted personal finances in the U.S.

The coronavirus continues to spread across the U.S. but over 40 percent of Americans are more worried about losing their jobs and making rent than they are about getting sick.

With the economy at a standstill, financial stress is at an all-time high. Recent surveys have asked Americans to open up about the impact the pandemic has had on their finances.

Coronavirus: Financial Stress Statistics 2020

How Has the Coronavirus Impacted Financial Stress?

According to research by Freedom Debt Relief:

27 percent of Americans have already experienced a furlough, layoff or job loss because of the pandemic.
56 percent of Americans are concerned about being able to afford to feed themselves and their families.
45 percent are struggling to make their rent or mortgage payments and 36 percent say they are likely to miss a payment in the next six months.
38 percent say they will miss a utility payment within the next six months.
30 percent are likely to miss their health insurance premium or a student loan payment in the next six months.
36 percent anticipate carrying a balance on their credit card for groceries.
21 percent anticipate carrying a balance on their credit card for utilities.
18 percent anticipate carrying a balance on their credit card for TV/Internet.

How Do Americans Plan to Spend Their Check from the CARES Act?

According to research by Crediful:

47 percent plan to spend their stimulus check on groceries.
46 percent plan to spend it on utilities.
42 percent plan to put it in savings.
28 percent plan to spend it on their rent or mortgage.
26 percent plan to spend it on their credit card debt.
16 percent plan to spend it on toiletries
13 percent plan to spend it on health or medical supplies.
10 percent plan to spend it on stocks and investments.
9 percent plan to spend it on student loan debt
7 percent plan to spend it on clothing.

We want to help employees access top quality financial information during this tough time. That’s why we’re offering three months of access to Best Money Moves, our premier financial wellness platform, for free.*

*This offer is available only to companies that are not already customers of Best Money Moves. This offer may be rescinded at any time. Contact sales@bestmoneymoves.com for details or set up a demo here.

Financial Impact of COVID-19 on Employees

Financial Impact of COVID-19 on Employees

Retirement

Emergency Savings

Debts and Everyday Expenses

How Financial Wellness Programs Can Help Employees Get Back on Track

More on Topics Related to the Financial Impact of COVID-19 on Employees

Coronavirus: Early Retirement Withdrawals and Savings by Generation

Coronavirus: Early Retirement Withdrawals and Savings by Generation

Millennials Retirement Withdrawals, Savings and Financial Stress

Generation X Retirement Withdrawals, Savings and Financial Stress

Baby Boomers Retirement Withdrawals, Savings and Financial Stress

More on Topics Related to Retirement Planning, Financial Stress and Financial Wellness

COVID-19: Forbearance and Debt Repayment Relief

Are My Debts Eligible for Forbearance? What Does It Mean If They Are?

If You Need Specific Info on Eligibility for Your Debts, Talk to Your Lender or Creditor

How Do Forbearance or Deferred Payments Work for Different Types of Debts?

Mortgages

Student Loans

Auto Loans

Credit Cards

Utilities and Property Taxes

Small Business Loans

More on Topics Related to COVID-19: Forbearance and Debt Repayment Relief

How Soon Will I Get My Stimulus Check?

How Soon Will I Get My Stimulus Check?

What You Need to Qualify for a Coronavirus/COVID-19 $1,200 Check

How Soon Will You Receive Your $1,200?

What If I Didn’t Sign Up for Direct Deposit?

More on Topics Related to Coronavirus Relief:

Coronavirus: Financial Stress Statistics 2020

Coronavirus: Financial Stress Statistics 2020

How Has the Coronavirus Impacted Financial Stress?

How Do Americans Plan to Spend Their Check from the CARES Act?

More on Topics Related to Coronavirus and Financial Stress

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