Time is running out if you want to take advantage of tax-friendly provisions in the Cares Act.
This year, Congress eased some regulations related to individual retirement accounts or 401(k), allowing many to tap into their retirement money because of the pandemic. However, some of the rules apply only in 2020. One example: you can take out up to a $100,000 dollars from an IRA or a 401(k) without the usual tax penalties.
“If you are in need, that means you’ve either had COVID, or have a hardship, meaning loss of job or loss of wages, you need to act now and, basically, tap into your 401(k) if you need it before the end of the year,” Michael Smith, the President of STA Wealth Management, said.
Smith also says come New Year’s Day, it may be more difficult to withdraw money from a 401(k) or get a 401(k) loan. He advises you to talk with an expert and come with a financial plan as soon as possible.