With full disclosure that I am not a tax attorney and I do not give tax advice, the COVID-19 pandemic has caused some changes that may allow individuals that are suffering financial hardship to make withdrawals or loans from their retirement accounts.

When the U.S. Congress passed the Coronavirus Relief & Economic Security Act (CARES Act) on March 27, 2020, it intended to assist Americans with financial relief to assist them during the COVID-19 pandemic. One area of the CARES Act set down new rules regarding withdrawals and/or loans from retirement accounts.

The CARES Act relaxed rules on loans or withdrawals from certain retirement funds so long as taken within a strict time period. Two examples:

1) The normal 10% penalty for early distributions of retirement funds up to $100,000 may be waived under certain circumstances. The taxpayer will still be taxed on the withdrawal, but no longer receive a penalty for early withdrawal.

2) The amount borrowed by a withdrawal from a 401K increased from $50,000 to $100,000.

Hopefully this helps during these difficult and historic times. As noted above, be sure to consult with your tax expert regarding your particular situation and whether these rules pertain to you personally before doing any withdrawals and/or loans.