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.