Some Americans remain unscathed
There are workers who have been more insulated from the recession and have used the pandemic as a time to build their nest egg. Nearly a third of Americans have put their stimulus money into a savings or retirement account, Jackson Hewitt data showed.
According to Voya Financial’s retirement plan participant data, of those who changed their savings rate with the investment management company, 64% increased plan contributions in the second quarter.
About 3% of people donated their stimulus checks to those in need, according to Jackson Hewitt.
Middle-class households face hurdles
The pandemic has revealed how much middle-income households are financially vulnerable, according to Peter Schneider, president at Primerica, a financial services provider.
About 51% of the middle-income families who have been financially affected by the pandemic are concerned about running out of money to pay for basic necessities by the end of the year, according to a recent survey from Primerica. The survey gauged the financial outlook and preparedness of those with annual household incomes between $30,000 to $100,000.
About 86% of middle-income households that said they have been financially impacted by the pandemic in at least some way. Just over a third of respondents believe their personal finances will recover from the effects of the recession in the next year.
Will there be a second round of stimulus?
The White House signaled its support for additional cash payments as part of the next recovery package. The House passed a Democratic bill calling for a second round of direct payments of up to $1,200 for individuals and $2,400 for joint filers. Senate Republicans also appear to be on board with an additional round of stimulus payments, although they want to limit who would qualify.
Senate Majority Leader Mitch McConnell suggested distributing the money to people who earn $40,000 or less per year, arguing they would benefit the most from another round of stimulus payments. But House Democrats in their bill, the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act, are calling for the next round of $1,200 stimulus payments to go to Americans earning less than $75,000 a year.
When it comes to enhanced unemployment, Republicans argue that the $600 boost was too high and a disincentive for Americans to go back to work. Democrats have said the program should be renewed and pointed to the still-high unemployment rate, currently 11.1%.