04.01.20
Coronavirus Stimulus Package Offers Relief for Retirees With RMD Waiver and Penalty-Free 401(k) Withdrawals
by: Michelle Singletary
Tucked in the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, are several provisions that cover retirement accounts. Required minimum distributions (RMDs) are suspended for 2020. Concerned that they would have to take distributions from their retirement accounts with the market now down sharply for the year, many seniors had hoped Congress would suspend their RMDs for 2020. If you are younger than 59½, you are subject to a 10 percent early withdrawal penalty on top of the income tax owed on your withdrawal. The CARES Act waives the 10 percent penalty for IRAs and defined contribution plans for participants experiencing financial hardship. Loan limits from retirement plans have been increased from $50,000 to $100,000. The existing rule that loans may not exceed half the vested account balance has been removed, AARP notes. New and existing loan payments can be deferred for a year.
Read the full article on Washington Post