Here’s a friendly reminder that you can withdraw from your retirement accounts without penalties, under the new COVID-19 law.  New rules on making loans from your 401(k)s will also be available, and some folks will avoid Required Minimum Distributions (RMDs) that otherwise would have forced taxable withdrawals.

See the CNBC article explaining the COVID-19 bill allows penalty-free access to early withdrawals from retirement accounts.

Similar to changes that have been done for retirement accounts during previous disasters; these current changes are far more intense than in the past.  The numbers of folks filing for unemployment increases the likelihood people will be tapping their retirement accounts for living expenses.

One provision in the bill allows account holders of any age to take as much as $100,000 from their retirement account without an early withdrawal penalty.  If the money is put back in the account within three years, there are no taxes.  If the money is not put back in he time period the taxes can be paid over the three years.  The law specifies that the withdrawal must be a “coronavirus-related distribution.”

Individuals who test positive for COVID-19, along with anyone who experiences adverse financial consequences because of the disease including being unable to find work or childcare, are allowed to make these penalty-free withdrawals.

The bill also eases your ability to borrow money from your 401(k) account, raising the limit on these loans from $50,000 to $100,000 and the repayment dates for these loans are extended for a year.

The rules requiring retirees in their early 70s to start making taxable withdrawals are suspended for a time period.

The bottom line is that you should think long and hard about withdrawing retirement funds and this should only be a last resort. Once the money is spent, it’s not able to grow tax deferred.

Reference:  CNBC – “Americans will soon be able to take penalty-free withdrawals from their 401(k)s, but experts say think twice about using retirement savings” (March 26, 2020)

About the Author: Randall Borkus

We believe that business succession, asset protection and estate planning are less about numbers and much more about helping people preserve, protect, and provide for who and what is most important to them.


  1. generic cialis May 12, 2020 at 7:19 pm - Reply

    Asking questions are actually nice thing if you are not understanding something completely, but this post offers good understanding yet.

  2. Royal CBD May 13, 2020 at 12:35 pm - Reply

    These are really fantastic ideas in on the topic of blogging.
    You have touched some pleasant points here. Any
    way keep up wrinting.

  3. cialis buy online May 20, 2020 at 7:48 pm - Reply

    My brother recommended I might like this website. He was entirely
    right. This post actually made my day. You can not imagine
    just how much time I had spent for this information! Thanks!

  4. cialis online purchase May 26, 2020 at 10:23 pm - Reply

    Asking questions are truly pleasant thing if you are not understanding anything
    completely, however this piece of writing provides nice understanding yet.

Leave A Comment