The CARES Act (Coronavirus Aid, Relief, and Economic Security), which became law on March 27, 2020, made some important modifications to retirement accounts for 2020. For example:
- Required minimum distributions (RMDs) are waived, for both account owners and beneficiaries who have inherited an account.
- The 10% early withdrawal penalty is waived for distributions up to $100,000, if any of the account owner, spouse or a dependent has been diagnosed with coronavirus; or if the owner has experienced adverse financial circumstances as a result of coronavirus.
- The maximum loan amount has been increased from $50,000 to $100,000, and a loan may equal the full vested value of the account.
Consult your estate planning attorney, accountant or financial planner about whether any of these changes may be beneficial to you in 2020.