The market reacts to pandemic news, a work-from-home tax could stimulate the economy, and retirees will not have to make mandatory withdrawals this year. Here's how the headlines could affect your money.
The major indexes fell Thursday on news of rising coronavirus cases throughout the country. Traders worried that the surge could hurt the economy. But the market rose Friday morning as traders bet on stocks that would benefit from an effective vaccine. (At least one could, hopefully, be available to Americans in the spring.)
A 5% tax on Americans who continue to work remotely after the pandemic is controlled could bolster the economy, according to a new study by Deutsche Bank.
Americans who work remotely are spending less on commuting, lunches, and business attire, but are earning the same salaries they did before the pandemic. So they could be charged a tax to offset some of that lost spending, the study argues.
Since 60% of workers now working remotely full time say they'd like to keep working from home even after offices reopen, according to the study, the tax could infuse close to $50 billion a year into the economy and subsidize the wages of low-income Americans who can't telecommute.
As of August, 24% of Americans worked remotely every day, according to the Federal Reserve Bank of Dallas.
At year's end, many older investors rush to withdraw their required minimum distributions (RMD). This year, they don't have to. Thanks to the CARES Act, Americans will not have to make mandatory withdrawals from their retirement savings accounts, including their 401(k) plans and IRAs.
RMD, or required minimum distribution, refers to the amount of money that must be withdrawn each year from certain retirement plans, including traditional IRAs and 401(k)s, so as not to incur a penalty. You may withdraw more than the necessary amount, but not less.
Although the daily news can have an impact on your wallet, remember to take a long-term outlook when it comes to decisions on spending, saving, and investing.
More from Grow:
- 133 million Americans have preexisting conditions. Here's what would happen if the ACA is repealed
- Unemployment falls, and how to keep calm when the stock market drops: What today's news means for your money
- 5.4M laid-off workers are now uninsured — here's how to get health insurance if you lose your job