OHIO COUNTY, W.Va. (WTRF) – Because of the COVID-19 crisis, the CARES Act has allowed for many financial options that have never been presented before. Access to corporate retirement plans have really changed, allowing for larger amounts than ever before.
First and foremost, before you do anything, talk to a tax preparer and your employer’s HR department, because there are consequences and rules you have to know.
If you are severely impacted financially due to the pandemic, there are options to tap into your retirement funds. You may be able to take a loan up to $100,000 but you must re-pay the principal and interest. And that interest does go back into your plan. Another option is to withdrawal the full amount of your account. The usual penalty of early distribution is waived at this time, but keep in mind taxes are still applied to that money.
Pete Holloway, the Senior Vice President of Hazlett, Burt & Watson, told 7News “if you’re taking the money out of the plan please don’t use it for an above ground pool or something like this, this should be for something that is an emergency situation; your rent, your mortgage, your utilities, your food. It really depends on the individual and their circumstances this really should, in my mind, be a last resort option the withdrawal where you take the money all the way out because that money can really help you in retirement.”
To qualify, you or a family member must have been diagnosed with the virus or have suffered job loss because of COVID-19. Required Minimum Distributions have also been suspended for this year,
and if you’ve already taken yours, there are options available to you.