GREENVILLE, NC (WITN) The new coronavirus economic relief law is making it easier for people in need to access retirement funds early to get through hard times right now.
The recently passed coronavirus aid, relief, and economic security act, or CARES Act, allows for people under 59 1/2 years old to withdraw up to $100,000 from their 401(k) plan without paying the traditional 10% penalty.
Withdrawals can only be made to cover financial hardships related to the coronavirus pandemic.
Greenville financial advisor Don Keel says you do still have to pay income tax on early withdrawals, but the law allows you to pay those taxes over a three-year time period.
Any withdrawals would have to be made during this calendar year.
Keel says withdrawing funds from your retirement plan should be a last resort, and advises paying any funds back in the next three years to avoid paying taxes on your own money and to protect your investments.
And Keel says when the economy begins to improve more people should explore financial planning options to be better prepared if a financial crisis like this were to happen again.