New CARES Act Provision Allows Early Retirement Money Withdrawl From Retirement Account Without Penality During COVID-19 Pandemic
Are you aware that the CARES Act made significant changes to the rules about withdrawing money from accounts? If COVID-19 and the pandemic has created an extreme hardship on your financial situation, you MAY have an option that you have not yet considered – but only through the end of 2020. Not many Americans have taken advantage of this new provision thus far.
As you may know, the general rule was that, you couldn’t take money out of your retirement accounts before you were 59 1/2 without incurring an “early withdrawal” charge or penalty. That 10% tax penalty was included by the IRS to discourage folks from taking money out of their retirements early.
CARES Act Changes:
- If you meet the criteria, you may withdraw up to $100,000 per person from certain qualifying retirement accounts without owing the 10% penalty. NOTE: This does NOT waive income tax owed on the withdrawal amount.
- You may ONLY withdraw the amount needed to overcome a specific group of defined hardships such as defending a foreclosure action, home repairs from a disaster, or medical