(WTNH)– The recently-passed CARES Act eases the rules associated with taking loans and distributions from your 401(k).
But while it may be tempting to tap into your account, it may not be the best option in the long-run.
Financial Consultant John Caserta explains how the CARES Act changed the rules for loans and distributions in the video above.
As it stands now, these distributions are available through 2020 and will also retroactively waive any penalty for distributions to Jan 1, 2020.
Caserta explains if you should take advantage of these new rules:
- Your retirement money should be a last resort. Ideally, you want your money to continue being invested for the long-run.
- However, if it’s necessary to access the money, I would talk about the how to structure the distribution with your accountant – what will be the tax implications.
- Also talk to your financial adviser about how this changes retirement projections and what this could mean for your long-term goals.