The COVID-19 pandemic is affecting all aspects of finances, including retirement savings. The CARES Act contains provisions affecting these plans that will remain in effect for 2020. They include the following:
These changes are intended to help mitigate the effect of the volatility of the stock market during the worldwide pandemic. The hope is that the market will gain stability as the pandemic eases, restoring value to retirement portfolios.
Before taking a loan, taxpayers need to be clear about their options. For example, their plan may offer more beneficial withdrawal options, or they might be better off selling securities outside the plan at a loss and using that loss to offset future gains. In addition, there still are provisions that need to be clarified and further guidance will be forthcoming.
Speaking with their financial advisor before taking any action is the best path for taxpayers who are thinking of withdrawing funds from their retirement plans.
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