How COVID is Affecting Your Retirement? -Maximize your retirement benefits during COVID.
As COVID-19 continues to impact the stock market and organizations around the world, we understand that you have concerns about how recent market fluctuations may affect your retirement plan. What you should know is that there are options you may have to minimize these effects on your business and your employees and maximize your retirement benefits during COVID.
If allowed by the CARES Act plan, certain participants may withdraw, penalty free, up to $100,000 between January 1, 2020 and December 31, 2020. You may also be able to take a higher loan amount out of your plan than normally allowed.
Who is eligible for these withdrawals/loans?
To be eligible to make such a withdrawal or request such a loan, the individual participant, or his or her spouse or dependent, must have been diagnosed with COVID-19, or the individual suffered adverse financial consequences due to COVID-19 (e.g., furlough, reduction in hours, unable to work due to childcare, loss of business, etc.).
In order to qualify for a coronavirus-related distribution, the participant must be a “qualified individual” who meets any of the qualifications below:
- who has been diagnosed with COVID-19 by a Center for Disease Control and Prevention (CDC) approved test
- whose spouse or dependent has been diagnosed with COVID-19 by a CDC-approved test
- who has experienced or experiencing adverse financial consequences as a result of being quarantined, furloughed, laid off, or having their hours reduced as a result of COVID-19
- who is unable to work due to lack of child care resulting from COVID-19
- who owns or operates a business that closed or has experienced a reduction in hours as a result of COVID-19
- other factors as determined by the Secretary of the Treasury
An eligible retirement plan for this purpose includes 401(k), 403(b), and governmental 457(b) plans, as well as Individual Retirement Accounts (IRAs) including SIMPLE IRAs and SEPs. These will help you maximize your retirement benefits during COVID.
Our partner Slavic has made hardship loans available. Attached is the Q&A sent out to clients and individuals. If you have any questions please do not hesitate to contact us.
Stay Healthy and Stay Safe.