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!
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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.