During challenging and unpredictable times like these, it is inevitable that some individuals or families may find themselves in a difficult financial situation.
These are often caused by reduced hours, company-wide pay reductions, furloughs, and layoffs. If you, a family member, or a friend are currently experiencing a reduction in the monthly income needed and are considering options for additional money to get through this event, don’t panic. Instead, refer to the general guide below.
This represents a potential hierarchy you could follow in identifying where additional cash could come from. in order to help determine the best source that may be available to help minimize the financial impact, start from the top of the chart and work your way down. The further down the list you go, the more of a negative impact the option may have, as a result of the tax impact, retirement impact, overall cost, and/or the potential for selling investments at a loss. Although retirement plan loans or hardship distributions are viable options, they can often be much more harmful than you know. Don’t raid your retirement before ensuring you’ve considered all your options!
Also, keep in mind that this hierarchy does not include the additional resources being made available by the Federal government during the COVID-19 crisis, such as stimulus checks, increased unemployment benefits, Federal student loan deferment, etc. But those should certainly also be considered!
