Under normal circumstances, withdrawing from retirement early should be a VERY last resort. Of course, these times are anything but normal. And some people feel like they don’t have a choice. Under the CARES ACT, there are a few protections to help out if you can’t survive without that money.
Retirement savers can withdraw 100% of their vested benefits up to $100,000 penalty-free from their qualified retirement plan. You have to have been diagnosed with coronavirus, have a spouse or dependent diagnosed, or be laid off or furloughed and have adverse financial consequences. Before you tap it though, keep in mind that you’ll have to pay taxes on it. There are some provisions about avoiding the tax if you pay in back in a few years or, if you can’t do that, CARES allows you to spread the tax burden over three years. Not all retirement plans will accept the CARES Act provisions though, so talk to a pro to see if this is the right move for you.
Read more from Forbes HERE.
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