Coronavirus Bill Lets Struggling Americans Tap Retirement Money
Lawmakers in Washington are making it easier for Americans struggling with the fallout from the coronavirus to draw on the trillions of dollars in their 401(k)s and other retirement accounts.
For a limited time, Americans would be able to withdraw money from tax-deferred accounts without penalties under a stimulus package approved by the Senate and awaiting a vote in the House. Rules on 401(k) loans would also be relaxed, and some retirees would avoid so-called required minimum distribution, or RMD, rules that might have been onerous.
Some of the changes mirror what’s been done for retirement savers after previous disasters. In general, though, the adjustments are “much more significant than what was done for the California wildfires or the hurricane in Houston,” said Gregg Levinson, senior director, retirement, at Willis Towers Watson.
That’s needed because “with Covid-19, we are in uncharted territory,” said Will Hansen, chief government affairs officer for the American Retirement Association. “With 3.3 million people filing for unemployment last week, I think we’ll see a lot more usage of these provisions.”
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