Even if it's comparatively cheaper to pull from a retirement account right now, an early withdrawal reduces your balance and diminishes future earning potential, and you'll pay taxes
, up to $100,000. Usually any nonqualified early withdrawal — money taken out before you turn 59.5, except in the event of death or disability — is subject to a penalty equal to 10% of the distribution amount. The relief bill waives that penalty.
The no-penalty allowance applies to "coronavirus-related distributions" — i.e. people who are diagnosed with COVID-19 or have experienced financial hardship from quarantine, layoffs, reduced hours, or furlough between now and December 31, 2020. It also includes people who are unable to work due to lack of childcare or business owners who can't operate right now.
"To some degree, accessing funds from your IRA or retirement plan should be the plan of last resort," Gorman said. "Retirement funds are for your life in the future. Only if things are dire should you touch it."
Singapore Latest News, Singapore Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
California lawmaker says state should free prisoners amid COVID-19 - Business InsiderSydney Kamlager, a state representative in California, says the crisis shows we can detain fewer people while maintaining public safety.
Read more »
Bank of America exec rejected staff COVID-19 fears: CNBC transcript - Business InsiderA leaked audio transcript showed a Bank of America exec rejecting concerns of staff who didn't want to come to the office for fear of the coronavirus
Read more »
The changes covid-19 is forcing on to businessOptimists see the current trends as offering new possibilities for reinvention. Pessimists see inefficiencies weighing on profitability for years to come
Read more »
SheaMoisture Is Giving $1 Million to Women of Color Whose Business Are Impacted by COVID-19SheaMoisture is stepping up and donating $1 million to women of color whose business are impacted by COVID-19.
Read more »
Listener Questions About At-Home Care For Patients Of COVID-19Dr. Lucy McBride, a doctor of internal medicine, gives advice for what to do if someone is recovering from the coronavirus at home.
Read more »
PM Johnson 'improving' in intensive care as UK ponders COVID-19 lockdownBritish Prime Minister Boris Johnson spent a third night in intensive care with COVID-19 complications but is improving and able to sit up as his government prepares to discuss how to review its most stringent shut down in the peacetime history.
Read more »