The ‘Stimulus 2020 Package‘ is making it easier for Americans struggling with the financial fallout from COVID-19. You can now draw on the trillions of dollars in your 401 K and other retirement accounts with no withdrawal penalty.
For a limited time, Americans will be able to withdraw money from tax-deferred accounts without penalties under a the most recent stimulus package. Rules on 401(k) loans will be relaxed, and some retirees can avoid so-called required minimum distribution.
According to Fortune.com, one provision lets investors of any age take as much as $100,000 from retirement accounts this year without paying an early withdrawal penalty. They also can avoid taxes on the withdrawal if the money is put back in the account within three years. If it can’t be returned, taxes can be paid over three years.
The site added, “The legislation requires that the money be a “coronavirus-related distribution,” but the rules are loose. People diagnosed with the virus are eligible, along with anyone who “experiences adverse financial consequences” as a result of the pandemic, including an inability to find work or child care. Retirement plan sponsors are told to rely on employees’ word that they’re eligible.It also makes it easier to borrow money from 401(k) accounts, raising the limit to $100,000 from $50,000. The payment dates for any loans due the rest of 2020 will be extended for a year.”
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401k Withdrawal Penalties Waived Under COVID-19 Stimulus Package was originally published on mycolumbusmagic.com