If your income has fallen or been cut off completely, we’re here to help. This guide will connect you to the basic information you’ll need to get through this, including on government benefits, free services and financial strategies.
If there’s something you need — or something you can offer that large numbers of people can access — please write to [email protected] Ron and Tara will respond to every message they can.
How unemployment insurance works
The coronavirus outbreak has already handed many people sudden drops in income, if it hasn’t dried up completely. Anyone who has experienced this or is worried they might needs to understand unemployment benefits.
How they work and how much they’ll help depends a lot on where you live. The program is jointly run by the federal government and states.
States have their own eligibility rules about how many hours you must have worked or how much you must have earned, and over what time span. Benefits are generally a percentage of your income over the past year, up to a certain maximum, but states set their own rules — and some are more generous than others. Typically, though, unemployment replaces about 45 percent of your lost income.
Most states pay benefits for 26 weeks, but some have pared that back: Michigan, Missouri and South Carolina pay benefits for 20 weeks; Arkansas pays for 16; and Alabama pays for 14. Five states — Florida, Georgia, Kansas, Idaho and North Carolina — have sliding scales tied to unemployment levels.
Many states only cover full-time workers, and some have made it more difficult for temporary workers to get coverage. Gig workers are also unlikely to qualify because they’re largely considered self-employed.
One important note: You might not even have to lose your job to qualify. If you’re quarantined or have been furloughed — and you’re not being paid but expect to return to your job eventually — you may be able to get benefits.
Where to get free financial planning help
Many financial advisers are offering free phone sessions to people whose incomes have fallen, no matter where they live.
The XY Planning Network of advisers has a spot on its search webpage for “Coronavirus help” and will be adding names to it as people sign up. There are already dozens.
We’ve heard from the following planners or firms who want to help as well: Daren Blonski, Wesley Botto, Jill Isbell, Fairlight Advisors, Ted Klontz, Andrew Komarow, Brandt Kuhn, Anna N’Jie-Konte, Elizabeth Lundstrom, Kevin Mahoney, Howard Morin, Maddi Napier, Kimberly B. Ogden, Alan Rhode, Matt Rinkey, Dawn Santoriello, Chris Saxton and Alex Wilson.
We’ve included links to their sites so you can see their experience and credentials. Nearly all of them are certified financial planners, a designation that requires continuing education and passing a difficult exam.
How consumer lenders are helping
On Sunday, Goldman Sachs and Apple told Apple credit card customers facing hardship that they could skip this month’s payment. They won’t have to pay interest, either.
We asked the biggest card, mortgage and auto lenders whether they would allow customers to do the same thing. American Express and Capital One said they would. If their customer service representatives claim ignorance, point them to this item and let us know if they still don’t help.
Bank of America, Barclays, Ford Credit and General Motors Financial will allow skipped payments, but interest will still accrue.
We could not get firm commitments from Bank of America, Citibank and Wells Fargo.
And Ally Bank, a big bailout beneficiary during the last economic downturn? They would not match the offer from Goldman Sachs and Apple.
Ways to keep the lights on and the phones working
Some utility providers are offering to stop cutting people off for nonpayment.
A number of large internet companies have agreed not to terminate residential or small business customers who can’t pay their bills: AT&T, Comcast, Cox, RCN, Sprint, T-Mobile and Verizon. A full list of companies is available on the Federal Communications Commission site.
It is not yet clear whether companies want customers to call to invoke this relief and provide proof or whether they will offer it automatically to everyone. People who need help should call and ask.
A number of water service providers have either suspended shut-offs for nonpayment or don’t shut service off for late payments generally, according to a ProPublica roundup. They include Atlanta; Birmingham, Ala.; Long Beach, Calif.; Los Angeles; Newark; New York City and St. Louis.
In Washington state, the main Seattle area utilities are suspending cutoffs as well. In addition, the provider of electric and water service in Seattle is allowing people to self-certify their recent income reductions in order to qualify for at least half off their bills.
In California, Pacific Gas and Electric has, until further notice, stopped shutting off its services to consumers and businesses who have not paid.
In New York, Con Edison also has temporarily suspended any electric and gas service shut-offs.
If utilities in other areas follow suit, they are likely to publish alerts somewhere on the top of their websites or in the news release section of their pages.
How student loan relief may help, or may not
President Trump said he was waiving interest on tens of millions of student loans held by the federal government until further notice. But here’s the catch: Monthly payments are not actually going to decrease.
Instead, people will pay the same amount they are currently. The difference is that the full sum will go toward the principal on their loans, according to a Department of Education spokeswoman.
That means they could pay their loans down faster, but they won’t have more money in their pockets now.
The biggest benefit may be to borrowers who have paused their monthly payments because of hardship, or may in the future. In student loan terms, this is known as forbearance. Normally, the interest on their loans would continue to pile up, but that won’t happen during the waiver period.
The waiver will not apply to student loans issued through state agencies and private lenders, including Sallie Mae. Other loans that are not part of the waiver program include the majority of Federal Family Education Loans, which are mostly held by commercial lenders, and school-held Perkins loans.
And if you take the tax deduction for student loan interest? The waiver might raise your tax bill, Forbes reported.
What a shady sales pitch looks like
Sometimes you can tell by the exclamation marks. One email sales pitch arrived with the subject line: “The Coronavirus may be Fatal — to Your Retirement Savings!”
It may be tempting right now to buy into anything offering safe returns. But now is when you’re most vulnerable — and you have to scrutinize any sales pitch more carefully than ever.
The sales pitch above involved an annuity. Not all annuities are ill-advised, but they’re often confusing. Some can provide retirees with a pension-like stream of income, which can bring peace of mind at a moment like this. But there are many kinds — some with unappealing attributes — and they can be offered by brokers collecting commissions of up to 8 percent, so they have plenty of incentive to close a sale.
“One of the things you don’t want to do is buy them when you are emotional,” said David Lau, founder and chief executive officer of DPL Financial Partners, which helps financial advisers find insurance products for their clients. “Now is not the time to rush out and buy an annuity because you are feeling panicked.”
Fixed-index annuities, for example, can keep most of your money locked up for many years, accessible only if you pay a painfully high surrender fee. You might also hear about buffer annuities, which allow investors to capture some gains, while curbing some, but not all, losses. Then there are variable annuities, which may promise guaranteed income. They are essentially a portfolio of investments tied to an insurance policy, which can be expensive.
“If you need more than the back of a cocktail napkin to explain the math, I’d be concerned,” said Mark Cortazzo, a financial planner and founder of Annuity Review, a service that analyzes annuity policies for a flat fee.
Mr. Lau suggested focusing not on what is being pitched, but on the problem you’re wanting to solve. If you want a guaranteed stream of income or to ensure you have enough to cover your fixed expenses, that’s a concrete goal you can keep in mind as you read the fine print.
How to prep for refinancing your mortgage
Mortgage rates are very low right now, so it’s a great time to refinance. But that means everyone else is trying to do it, too.
Lenders are being swamped by requests, and you can only lock in a low rate for so long. And if you don’t get everything done during the lock-in period, your lender might charge you a fee to extend it.
Communicate constantly. It sounds simple, but check your voice mail and your spam folder. Don’t miss a request for a document. And respond right away.
Pick your rate and go. Don’t get distracted by changing rates, and know how to find them. The best rates don’t always show up on aggregator sites, so contact your current lender directly. And once you find the rate you want, be careful not to miss your chance by shopping around some more.
Ace your appraisal. Print out listings of comparable properties for your appraiser, who might not know your area well. If you remodeled, provide before-and-after photos and paperwork.
Avoid dumb credit moves. Lenders often check your credit report more than once during the application process. If there have been inquiries or new debt, they come back to you with questions, which slows things down.
“Don’t open up any new auto loan, credit card or any new credit while this is in process, period,” said Bill Banfield, an executive vice president at Quicken Loans, the nation’s largest lender. “People get very excited about refinancing and suddenly want to go out and buy a new BMW.”