In this video learn how the new CARES Act will impact your 401(K) account.
Lynnette Khalfani Cox: If the coronavirus crisis has left you short of cash, you should know about some legislation the Fed’s just passed, to make it easier for you to tap into your 401(k).
For starters, they’ve increased the amount that you can borrow from your retirement assets, whether that’s a 401(k), a 403(b) or a 457 plan.
In essence, you used to be able to only borrow as much as $50,000. Now they’ve doubled that to $100,000. Additionally, they’ve made it easier to tap into your funds, by accessing it through something called a hardship distribution.
Essentially, again, you can get up to $100,000 out of your 401(k) fund, without having that nasty 10 percent penalty. You will have to still pay taxes on any distributions you take, but at least it’s not the same as paying that extra 10 percent to Uncle Sam.