Up & Coming Weekly

April 07, 2020

Up and Coming Weekly is a weekly publication in Fayetteville, NC and Fort Bragg, NC area offering local news, views, arts, entertainment and community event and business information.

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Page 8 of 24

8 UCW APRIL 8-14, 2020 WWW.UPANDCOMINGWEEKLY.COM JOHN HOOD, Chairman of the John Locke Foundation. COMMENTS? Editor@upandcomingweekly.com. 910- 484-6200. Over the past two weeks, Gov. Roy Cooper and local officials have imposed a regulatory regime of increasing severity on North Carolinians. eir stated goal is to slow the spread of COVID-19 so the number of cases requiring hos- pitalization won't shoot far above the maximum capacity of hospitals and other health providers. eir goal is not to contain the spread of the virus in the long run. Most officials grant that a large swath of the population already has been or eventually will be infected. In the vast majority of cases, the infected will experience either mild symptoms or none at all. But some will be hospitalized, and a small share — disproportionately older and suffering from serious preexisting conditions — will not survive their bout with the virus. Did Cooper and local officials make the right call? I don't know for certain. Neither do you, to be blunt. ey are acting on limited, incomplete and problem- atic data. I recognize they are under extreme stress, likely sleep-deprived, and facing a set of unattractive policy choices. I don't envy the position they're in. I respect their public service and pray for them. You should, too. But that doesn't mean we should simply accept their deci- sions without scrutiny or complaint. Our government hasn't just shut down businesses (some potentially for good), thrown hundreds of thou- sands out of work and disrupted the daily lives of millions of North Carolinians with no clearly articulated standard for when the dictates will be lifted. Our government has also suspended our basic liberties as citizens of a free society. I have been ordered, under threat of arrest and imprisonment, to minimize my contact with friends and family who live across town or in another city. I have been ordered, under threat of ar- rest and imprisonment, not to as- semble with others to express our jointly held opinions or practice our jointly held faith. If you think I am arguing the government should never have the power to do these things, you are jump- ing to the wrong conclusion. As an advocate of limited, constitutional government, I grant that infectious disease is one of the few cases in which highly coercive action may be required to protect public health and safety. It is one of the rare exceptions to the rule that private property should be inviolate and that informed consent, not government dictate, is the proper way for people to manage the risks and rewards of life in a civilized society. e threshold for government to resort to such measures should be extremely high, however. And I get very suspicious when I see public officials justify actions such as shelter-in-place orders with the claim that "if even a single person's life is saved, it will be worth it." Let me be crystal clear: anyone who says that should be kept far, far away from wielding governmental au- thority at any level. ey lack the knowledge and judg- ment to make reasonable public policy. ey exhibit a basic ignorance of how free societies work. If North Carolina set a maximum speed limit of 25 miles per hour on every road and street, we would see fewer traffic fatalities. If North Carolina prohibited swimming pools, we would see fewer drownings. And if North Carolina issued a shelter-in-place order every year from December to March, we would see fewer deaths from influenza and other familiar but deadly diseases. For progressives who don't yet get the point, try this one: every year, a small but tragic number of murders are committed by people who are living illegally in the United States. If we strictly enforce immigration laws and deport as many unauthorized aliens as we can, many of those murders will not occur. e draconian response to COVID-19 has imposed grave economic and social consequences on North Carolinians and other Americans. ey won't shelter in place for months. ey can't. And they'll become in- creasingly impatient with leaders who offer them plati- tudes instead of a practical plan for moving forward. Shelter-in-place isn't sustainable by JOHN HOOD OPINION You contribute to an IRA and 401(k) to help build the financial resources you'll need to enjoy a comfortable retirement. But de- spite these funds being set aside for retirement, many investors use them before they retire. More than half of Americans tap into their retirement savings early, ac- cording to a survey from Magnify Money, a website focusing on financial topics. How can you avoid this problem? It's obviously important to leave your retirement savings untouched, as much as possible, until retirement. You could spend two or three decades as a retiree, so you'll need a lot of financial resources. Of course, it's understandable why some people touch their retire- ment accounts early: According to the Magnify Money survey, about 23% did so to pay off debts, 17% to make down payments on a home, 11% to pay for college and the rest for other reasons. While you also might consider these needs for tak- ing an early withdrawal or loan from your retirement account, you've got good reasons for not touching your IRA or 401(k) before you retire. First, you may face tax penalties if you withdraw money from your IRA and 401(k) before 59 ½, though there are exceptions. Also, if your withdrawals from your retirement accounts are large enough, they could push you into a higher tax bracket. Plus, the longer you leave your money intact, the more you'll probably have when you need it in retirement. Let's use the survey results to look at some additional points you might evaluate before using funds from your retirement accounts for other purposes: Paying off debts — You could consider using a 401(k) loan to pay down some high- interest rate debt, but this move assumes two things — one, you don't plan on taking on additional high interest rate debt, and two, you plan on repaying the loan from your 401(k) within five years. If you don't, you could face penalties. Making a down payment on a home — e IRS allows first-time home buyers to make a penalty-free withdrawal of $10,000 from an IRA to make a down payment on a home; however, taxes could still be owed. You might be better off by delaying the pur- chase of a home, giving you time to build up addi- tional savings, held outside your retirement accounts, that could be used for the down payment. Paying for college — If you haven't saved enough for a child approaching college, you might consider withdrawing from your retirement accounts to do so. If the funds are used for qualified education expenses, you may be able to withdraw from you IRA without paying a penalty, but again, taxes could be owed on the withdrawn funds. Alternatively, if you have more time, you could consider opening tax-ad- vantaged 529 accounts for younger children to help pay for their education. As the name suggests, a retirement account is de- signed for retirement, so do whatever you can to protect it. You may want to consult with a financial professional for guidance on meeting the other needs people cite in tapping into their retirement accounts early. e more you know, the better prepared you'll be to make the best decisions you can for your situation. Avoid touching retirement savings early submitted by DEBBIE BEST MONEY DEBBIE BEST, Financial Advisor at Edward Jones Investments. COM- MENTS? 910-488-7535 e draconian response to COVID-19 has imposed grave economic and social con- sequences on North Carolinians and other Americans. As the name suggests, a retirement account is designed for retirement, so do whatever you can to protect it.

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