Coronavirus Stimulus Bill allows early 401k or IRA retirement account distributions and loans. RMD Suspended For 2020.

Under the recently passed $2 trillion CARES stimulus bill, workers will see a temporary loosening of the hardship distribution rules from retirement accounts. Eligible people affected by COVID-19 related fallout will have access to up to $100,000 (or 100% of their account balance if lower) of their retirement savings without the 10% penalty that is currently in place.

The law also doubled the amount participants can take in loans from a 401k or IRA account for the next six months to the lower of $100,000 or 100% of the account balance. Note – IRAs don’t permit loans.

For retirees, the law suspends 2020 Required minimum distributions (RMDs) from tax-deferred 401(k)s and individual retirement accounts starting at either age 70½ or age 72. This is good news for those that have seen sharp falls in their portfolio values.

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3 thoughts on “Coronavirus Stimulus Bill allows early 401k or IRA retirement account distributions and loans. RMD Suspended For 2020.

  1. Suspension of 2020 mandatory distribution from IRAs: Does this apply to people who are already taking RMD for last several years? Also, is there any requirement which will mandate additional RMD to be taken in 2021?
    Thanks. MG

    1. You can still take the RMD, it’s just not mandatory. 2021 should see a return of standard rules unless Coronavirus related fallout continues.

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