New Rules for Hardship Retirement Plan Distributions

The recently-enacted CARES Act introduced us to some new rules regarding qualified retirement plans (like a 401-k) and IRAs. These new rules are actually more like temporary “allowances,” as they provide a window of opportunity that may allow you to take advantage of some penalty-free distributions during the pandemic.

What’s new is something called a CRD — COVID-Related Distribution — and it’s important that people who need to access their savings during this time of crisis know how they work. If done properly, they may provide some much-needed relief. And while we don’t always recommend that someone take loans or premature distributions from their retirement plans as their first option, this may be the right thing for certain people to consider.

Join “Professor” Rick Plum, CFP® and webinar host Johnny Dean as they discuss the rules, time considerations, and other fine points of taking a hardship withdrawal through a CRD in this week’s edition of Lucia Capital Group Weekly!

Important Information

The information provided should not be considered specific tax, legal, or investment advice and is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. This material was gathered from sources believed to be reliable, however, its accuracy cannot be guaranteed.

You should always seek counsel of the appropriate advisor prior to making any investment decision. All investments are subject to risk including the loss of principal. This material was gathered from sources believed to be reliable, however, its accuracy cannot be guaranteed.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

No client or prospective client should assume that the presentation (or any component thereof) serves as the receipt of, or a substitute for, personalized advice from Lucia Capital Group or from any other investment professional.

IRA withdrawals will be taxed at ordinary income rates. Withdrawals prior to age 59½ may also be subject to a 10% penalty tax.

Raymond J. Lucia Jr. is chairman of Lucia Capital Group (“LCG”), a registered investment advisor and CEO of its affiliated broker-dealer, Lucia Securities, LLC (“LSL”), member FINRA/SIPC. Advisory services offered through LCG. Securities offered through LSL. Registration with the SEC does not confer any certain level of expertise or training. Rick Plum is a registered representative of, and offer securities through, LSL. Rick Plum also offers advisory services offered through LCG. John Dean is an associated person of LSL.

Start Your Strategy

Personalized investment advice and support to help grow your portfolio