Lawmakers in Washington, D.C., have finally reached a tentative deal to authorize the issuance of a second coronavirus-related stimulus check to qualified recipients. This is follow-up legislation to the payments authorized by the CARES Act passed in March.
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The direct payments to Americans this latest bill authorizes are intended to help individuals and families cope with the economic fallout from the ongoing coronavirus pandemic.
If you are a Social Security retiree, you may be wondering if you're likely to receive this soon-to-be authorized COVID-19-related payment and how much money you're in line to get. Here's what you need to know.
This is how much Social Security retirees will receive from the second coronavirus stimulus check
The good news for retirees is that they are not excluded from receiving the second coronavirus stimulus check. Some of the plans under consideration when the bill was being negotiated -- such as payroll tax reductions -- would have left out most seniors on Social Security.
The bad news is, the next COVID-19 stimulus check will be smaller than the last one -- not only for retirees, but for most Americans. While the CARES Act authorized payments valued at up to $1,200 for each eligible adult and $500 per eligible dependent, the deal lawmakers reached this time isn't so generous. The next coronavirus payment will be worth a maximum of $600 for each adult and eligible dependent.
There are income limits that apply again. These are expected to be the same as they were under the CARES Act. That means retirees who file taxes as single with incomes up to $75,000 will get the full payment and those who file married joint returns with an income up to $150,000 will get the full amount. Above these thresholds, payments phase out, so retirees with incomes above $87,000 for single filers or $174,000 for married joint filers will generally not get any money.
Most retirees do not have child dependents that would entitle them to the additional $600 deposits beyond the ones they're personally eligible for. That means it's most likely that Social Security beneficiaries who are single will get a total of $600 if their income is not too high while married senior couples will get $1,200 in combined stimulus money.
The IRS could begin sending out payments as early as the week of Jan. 4 via direct deposit while paper checks should start getting mailed around a week later, assuming the agency follows a similar timeline as it did for CARES Act payments. However, this could change if there is a delay before the president signs the new coronavirus stimulus legislation into law.
Retirees should consider carefully how best to spend their stimulus funds. Older Americans will receive only a small Social Security cost-of-living adjustment next year, which is likely to accelerate the decline in buying power that has been ongoing for decades. And there's a very real chance this stimulus check will be the last one, especially with vaccines now approved.
Seniors who don't need the money from the coronavirus stimulus check to cover their essential costs in the short term may wish to use the funds to bulk up their emergency savings, or they may wish to invest the money to pad their retirement accounts.