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IRA Financial Group Blog

Will A Second Stimulus Package Happen?

3 Minute Read

In March, 2020, the CARES Act, or Coronavirus Aid, Relief, and Economic Security Act, was put into effect, with many Americans receiving stimulus checks and businesses both small and large receiving payment protection.

Key Points
  • Many Americans received $1200
  • A new stimulus package could repeat that amount
  • Congress and the President are agreed a package is needed

Stimulus Package – Round 1

The CARES Act was in response to the COVID-19 shutdowns and the massive unemployment that came about because of layoffs and furloughs. Even now the United States is suffering from the effects of a virus that will not subside, despite many places taking precautions such as social distancing and wearing face masks.

One criticism of the CARES Act was the restriction on older teens and college students. Only dependents under 17 years old were eligible for the $500 payments, which excluded many high school juniors and seniors, as well as college students who were claimed as dependents on their parents’ taxes.

Lasting Economic Impact

More than 50% of respondents to a Betterment survey indicated that their earnings have been affected by COVID-19. For a country that has many citizens without sufficient emergency savings the coronavirus pandemic has hit especially hard.

Furloughs are not ending as quickly as economists hoped, as the virus continues to ravage the country. Layoffs are actually increasing, with unemployment filings higher than expected and rising. This makes saving money even harder.

Stimulus Package – Round 2

The House has passed a $3 trillion Health and Economic Recovery Omnibus Emergency Solutions, or HEROES, Act, which would authorize another round of stimulus payments for most U.S. households. While it still needs to pass the Senate, most elected officials agree on the need for some sort of additional stimulus package, with both the President and Secretary of the Treasury very seriously considering additional relief for Americans.

A second stimulus package could have as much as $1200 per person in a household, up to $6000, with children receiving additional funding this time over last. Income requirements that may depend on newly filed taxes could change the amount received, but current wisdom indicates about the same amount as last time.

Setting It Aside for Savings

If a second stimulus package happens, it could be a great time for setting some money aside for retirement. If the CARES Act helped you get back on your feet, and a second check comes, it can help you prepare for the future. Saving for retirement can help you prepare for an emergency, too. The importance of investing in alternative assets comes down to investment diversification. Diversifying your retirement portfolio with US equities, as well as alternative assets is a risk mitigation strategy. For example, if the U.S. stock market takes a hit, you can fall back on your real estate, cryptocurrency or precious metal investments.

ROBS Solution

Now can be an excellent time to invest in a Self-Directed IRA, which can be used to fund a business or franchise using the ROBS Solution. ROBS Solution, or the Rollover Business Start-up (aka Rollover as Business Startups), is an IRS and ERISA approved structure. It allows you to invest funds from your retirement account into a new business/franchise. You can remove funds from a Traditional 401(k) or IRA Plan to purchase a new or existing business or franchise tax-free and penalty-free.

Real Estate

Your Self-Directed IRA can be used to purchase real estate, as well. Purchases can include house to flip, investment properties, raw land, and more. Real estate is typically a safe investment in times of upheaval and stock market volatility.  A Real estate investment is a highly tangible asset that can diversify your investment portfolio. Furthermore, it acts as a hedge against inflation: while the value of many investments erode during inflation, real estate thrives. With the rise of inflation comes the inevitable rise of rental income.


Cryptocurrency includes Bitcoin, Ethereum, and others, and is a popular investment opportunity, especially with millennials. Traditional investments do not tend to be as volatile as crypto can be, but in recent months, it has been a good bet. Diversifying a portfolio can help protect against fluctuations of all types.

Looking Ahead

Whether a second stimulus package is put into effect or not, saving for retirement is a great idea. The CARES Act even allowed savers to tap their retirement accounts if needed.

If these suggestions are not a part of your retirement planning or don’t match with your goals, self-directed retirement accounts are able to invest in traditional options such as the stock market and mutual funds, as well. In fact, aside from most collectibles, life insurance and a transaction involving a disqualified person, investments can be made in just about anything you can think of. 

It’s important to keep in mind that any investment made with your IRA can only benefit the IRA itself, and not you personally.  Therefore, if you invest in a vacation home, you (or any disqualified person) cannot personally utilize the property.  However, once you distribute the home from your IRA during retirement, you can use it. Reach out to IRA Financial for more information on how to save for retirement.

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