The new coronavirus relief bill relaxes rules on 401(k) withdrawals for those affected by the virus.
Savers would be able to take a hardship distribution of up to $100,000 from their 401(k) accounts without a 10 percent early withdrawal penalty. That works for those who are laid off and want the money for mortgage payments, for example. Warning: withdrawals are not tax free.
Retirees who don’t need distributions from their accounts can suspend the required minimum for all of 2020.
Many retirees have found that the value of their accounts has dropped dramatically. Leaving money in place allows their investments to recover as the virus crisis eases and the economy recovers.
The withdrawals are not tax-free, however; the bill gives you three years to pay the taxes on the withdrawals, according to CNBC.
