The massive $2 trillion stimulus package that the U.S. House of Representatives is likely to vote on tomorrow is imperative to help Americans get back on their feet, but probably won’t be enough to get the country past the unprecedented economic fallout from COVID-19, said Ric Edelman, executive chairman and founder of Edelman Financial Engines, in an interview with Financial Advisor today.

In a far-ranging Q&A, Edelman, who founded his firm in 1984 and had grown it to 330 advisors and $229 billion in assets as of December 31, discussed the type of financial assistance individuals and business owners will receive, as well as the shake-up he believes will hit the advisor industry.

FINANCIAL ADVISOR MAGAZINE: What do you like about the stimulus package? How do you think it will help investors?

RIC EDELMAN: One provision would waive minimum required distributions (RMDs) when there has not been enough time to recover losses from retirement accounts. It’s not as crucial for our clients as it is for as many other millions of Americans. We all know statistics of how little most Americans have saved, and most of it is in retirement accounts, so as we experience massive unemployment, the asset that they’re likely to turn to is their IRA and 401(k). If they don’t have the ability to tap money freely, we are making their dire situation even more dire.

There’s also a provision that would permit limited early withdrawals and higher loan amounts from retirement accounts. We are not excited about the notion of people borrowing from retirement accounts prior to retirement. It’s always an action of last resort. But we have to get through the crisis now. Congress must allow people to access their money without incurring taxes, penalties and interest.

FA: Is the $1,200 direct payment individuals are set to receive enough?

EDELMAN: It’s not enough. This is going to prove to be the first of several stimulus packages before this is over.

FA: Are you offended by what some have termed the pork in the bill, such as the $75 million for public broadcasting companies such as NPR [National Public Radio]?

EDELMAN: Of course, the pork is disappointing to see; however, it is politically unavoidable. We also have to acknowledge that there really is no such thing as pork. When it goes to NPR, for instance, it is going to pay salaries and help people provide for their families.

You can argue that some people didn’t need the money as much as others. That is always an unintended side effect of a bailout.

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