We are in the midst of challenging times; emotionally, socially, and financially. We are having to take on roles we never thought we would all while being separated from our friends and family. The news is almost always negative and I’m pretty sure most of us have suffered financial loss in one form or another. In an effort to help, Congress passed the CARES act which provides some relief for certain individuals and small businesses. I thought it might be helpful to summarize some of the provisions in the act you might not be familiar with:
- Coronavirus-related Retirement Plan Distributions: Waives the 10% early distribution penalty for “coronavirus-related distributions” (CRD) made any time in 2020 before turning age 59 ½, upt to . $100,000 limit from IRA as well as 401(k), 403(b) and 457(b) plans. Certain criteria apply. https://www.natlawreview.com/article/sample-employee-notice-coronavirus-related-retirement-distributions
- Retirement Plan Loans: Increases plan loan limits to lesser of $100,000 or 100% of participant’s vested account balance, taken within 180 days of enactment (3/27/2020). Individuals with a current plan loan with a repayment due from the date of enactment of the act through Dec. 31, 2020, can delay their loan repayment(s) for up to one year.
- Waiver of 2020 Required Minimum Distributions (RMDs): Waives RMDs for calendar year 2020 for IRAs and DC plans, including 401(k), 403(b), and 457(b) plans. Inherited Retirement Accounts (IRA, 401(k), etc.): Designated beneficiaries who inherited certain retirement accounts (401(k)s, IRAs, etc.) also benefit from the waiver—their minimum 2020 distributions are suspended.
- Extension of Traditional IRA/Roth IRA 2019 Contribution Deadline: The IRS extended the 2019 traditional/Roth IRA and HSA contribution deadline to July 15 th (from April 15).
If any of the above options of the CARES Act may apply to you or maybe you aren’t sure and just have questions, we are here to help. If you are a small business owner and need help in understanding the resources available under the CARES Act, please reach out to us.
We understand these challenging times can bring anxiety and apprehension. It’s times like these where having a financial plan can ease some of that stress. At Guided Capital Wealth Management, we have developed and refined a process where we put together the pieces of the financial puzzle to help our clients work toward their goals. Let us know if we can help guide you through these turbulent times.
Chief Operating Officer
Wealth Management Advisor
Guided Capital Wealth Management is a dba of Merit Financial Group, LLC, an SEC registered investment adviser.