How COVID-19 may affect your retirement
On March 25, 2020 the Senate approved the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The bill is now before the House and we anticipate learning additional information within the week. Look below for a summary on how this relief package may extend assistance for and affect your retirement plan withdrawals.
Retirement Plan Withdrawals
- Waives 10% early withdrawal penalty for distributing up to $100,000 from qualified retirement accounts for coronavirus-related purposes made on or after January 1, 2020.
- Income attributable to such distributions is subject to tax over 3 years, and the taxpayer may recontribute the funds to an eligible retirement plan within 3 years without regard so that year's cap on contributions.
- The provision provides flexibility for loans from certain retirement plans for coronavirus-related relief.
- Coronavirus-related distribution is one made to an individual:
- Who is diagnosed with COVID-19,
- Whose spouse or dependent is diagnosed with COVID-19 or,
- Who experiences adverse financial consequences as a result of being: quarantined, furloughed, laid off, having work hours reduced, being unable to work due to lack of child care due to COVID-19, closing or reducing hours of a business owned or operated by the individual due to COVID-19 or,
- Other factors as determined by the Treasury Secretary.
- Waives required minimum distribution rules for certain defined contribution plans and IRAs for calendar year 2020.
- Provides relief to individuals who would otherwise be required to withdraw funds from such retirement accounts during the economic slowdown due to COVID-19.
For FAQ on how COVID-19 may affect your retirement plan, click here to learn from Principal®, a member continuing to advocate for relief. During this time of uncertainty, Principal® has added a resource page and this FAQ list has been provided with their permission.
For more information visit our COVID-19 Guidance Center.
Tips of where to get your information about the virus
Where to find local updates about the virus
Decatur County Health Department Facebook Page
Bartholomew County Health Department Facebook Page
Ripley County Health Department Facebook Page
Franklin County Health Department Facebook Page
North Vernon Plain Dealer & Sun Homepage
We are committed to serving clients with care, and we are confident we are taking precautionary measures to promote the health and safety of our staff and clients. We know that this is a stressful time for everyone, and we hope that you, your family and our community stay safe.
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