Due to coronavirus, the CARES Act has outlined several provisions to relieve the financial burden on the economy right now. If you are allowed to take money out of your retirement accounts without penalty, should you?
Click the timestamps below to jump ahead in the episode…
Other Retirement Facts:
The CARES Act has put in certain provisions to help during coronavirus, which includes allowing you to take out up to $100,000 from your retirement accounts for a coronavirus related issue. Whether that’s to cover medical bills or to help following a job loss, this can now be taken out without the penalty you would normally pay.
So, is it wise to tap into your retirement accounts right now? Be sure to consider the options you have. Be careful about how much you take and remember that this is taxable income! You are allowed to put the money back within the next three years, but be cautious about this as many people will rarely return it. Try to treat this as a last resort.
Prior to coronavirus, what does taking money out of a retirement account early typically look like? Is it ever wise to do this? You want to avoid making an emotional decision and be sure to talk it over with an advisor (and your spouse) to plan for your future.
Another provision of the CARES Act is bumping the federal tax due date to July 15. The state due date varies and there are some reasons why you may want to continue to file earlier if possible. Make sure to ask your tax preparer or CPA to ensure it is done correctly.
Lastly, Phil answers a question from the mailbag about what to do when considering selling rental properties.
Listen to the full episode or click on the timestamps below to hear more about a specific segment.
2:03 – What should you do about tapping into retirement accounts?
4:50 – Are these provisions in the CARES Act helpful?
6:54 – Could this hurt your retirement?
7:56 – What happens when someone is furloughed?
10:26 – In “normal” times, does it work when people take out money from their retirement or 401(k) as a loan?
13:46 – What is the current state of the market and economy?
15:24 – When is the new tax deadline for 2020?
17:16 – Mailbag: If I sell rental properties, how should I invest the equity money once I sell them?
A Quotable Moment: