Posted on 06/19/2020 4:13:50 PM PDT by Kenny Bania
More people will be eligible to take a $100,000 coronavirus-related distribution from their retirement account.
The IRS released guidance on Friday which details new rules for individuals affected by Covid-19 to take a withdrawal from a 401(k) plan or an individual retirement account.
The CARES Act allows savers to take coronavirus-related distributions – emergency withdrawals – of up to $100,000 from their retirement plans and IRAs. And those who are under age 59½ can access the money without the usual 10% early withdrawal penalty.
(Excerpt) Read more at cnbc.com ...
DON'T DO IT. $100,000? Insane. You'll regret it.
Yep, you’ll take a double hit considering the value of your investment is likely already down due to the stock market (not down as much as a month ago, but still 10%-15%). So you’ll be withdrawing money in a trough instead of peak like you should aim for when you retire.
You still have to count it as income this year, just no penalty. If you have an exceptionally large balance and lost significant income this year, I don’t see a reason not to take advantage of it, but consult a professional.
If you are older than 59 1/2 what benefit do you get that you would not already have?
Getting the money is the easy part. Paying is back is lots less fun.
The IRS? Nothing in US Gov’t is free!
“Dear Freepers,
DON’T DO IT. $100,000? Insane. You’ll regret it. “
Yep! The wife and kids don’t have to eat.
You could read the article but I think there is a guideline against posting if you do?
“You still have to count it as income this year, “
Possibly not.
Improvise, Adapt, Overcome.
I’d work six menial jobs @23 hours/day before I’d raid my retirement accounts.
it would sure help restore the economy, business and employment opportunities if the taxation of retirement plans were simply ended now
DON’T DO IT. $100,000? Insane. You’ll regret it.
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I tend to agree but its not really that clear cut. There could be extenuating circumstances. For example, some people might want to use the money to pay off mortgage debt and other financial obligations, especially if in or nearing retirement.
A person would be best advised to chat with a reputable advisor before making any decisions. But be very careful who you consult with.
I'd take it out rather than go into debt.
If I could take it out tax-free - not just penalty-free - I’d do it instantly to set it free from gov’t control...
but I can’t.
“I’d work six menial jobs @23 hours/day before I’d raid my retirement accounts.”
Dude had to go to the MI Supreme court just to be able to cut hair. Where are you going to find six jobs?
These individuals can also spread the income tax from the withdrawal over three years. However, if they repay the money into the account within that time periods, they can avoid the tax.
I did. I’m semi-retired at 58, and need about $100K over the next few years. I planned on paying the 10% Penalty. Now, nope! $10K tax savings. Vetted with my CPA tax preparer.
P.s. it was dry cash cashed on before corona hit. I could see that freight train coming, and stepped aside.
Yes. BAD idea!
None.
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