Best Strategy For The CARES Act Stimulus Check

various US currency rolled tightly and lined up together, including a twenty and one hundred dollar bill

The CARES Act passed by Congress and signed by President Trump provides for up to $1,200 stimulus checks to be paid to millions of Americans. Here’s a quick breakdown of who will receive how much money:

  • This is a one-time payment. The calculation for eligibility is based on your 2019 earnings or 2018 earnings if you haven’t filed for 2019.
  • Single filers earning less than $75,000 will receive the full $1200. The stimulus check reduces (to $0) proportionately for earnings between $75,000 and $99,000.
  • Joint filers receive $2400 for earnings up to $150,000 and phases out entirely for earnings above $198,000.
  • You receive $500 for each dependent child, age 18 or younger. A family of four earning under $150,000 would receive $3,400.
  • The checks will not be taxable and are expected to arrive the third week of April for taxpayers who have set up direct deposit with the IRS. For all others, the checks will be mailed and will take longer.

What’s your best strategy?

For most people, this money should go straight into the bank. While a lot of people believe things will return to normal in a few weeks, there is a strong possibility of the effects of ‘shelter at home’ could last months. In that situation, cash is king, and you’ll want to preserve some money to pay for essentials…food, housing, utilities.

If you’re confident that you have adequate reserves and your job is secure, you can either use the money to pay off debt (consider debt with the highest interest rate such as credit card debt) or, for the brave souls, invest in stocks that have taken a beating during this crisis. A discount broker such as Charles Schwab or Vanguard has endless possibilities and no commissions.

Follow The Welch Group every Tuesday morning on WBRC Fox 6 for the Money Tuesday segment.


Best Strategy for Your Stimulus Check

  •  $1200 per adult
  • $500 per dependent child
  • In a crisis, Cash is King!
  • Expect checks late April/early May


Stewart H. Welch, III, CFP, AEP, is the founder of THE WELCH GROUP, LLC, which specializes in providing fee-only investment management and financial advice to families throughout the United States. He is the author or co-author of six books, including  J.K. Lasser’s New Rules for Estate, Retirement and Tax Planning- 6th Edition (John Wiley & Sons, Inc.); THINK Like a Self-Made Millionaireand 100 Tips for Creating a Champagne Retirement on a Shoestring Budget. Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by The Welch Group, LLC (“Welch”), or any non-investment related content, made reference to directly or indirectly in this article will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. More information about The Welch Group and important Disclosures can be found on our website. Consult your financial advisor before acting on comments in this article.