I drafted a notice to my firm’s clients so they can have a clear understanding of the provisions in the CARES Act, the $2 trillion economic rescue bill that President Trump signed into law last week. I wanted to share some of this information.
I am only including information about how the act actually impacts someone’s individual retirement account.
Here are some key points that have been raised:
Can I take money from my IRA to cope with the economic slowdown?
The answer is yes. And what the CARES Act does is it waives the 10% early withdrawal penalty. So you are free and clear to withdraw up to $100,000 from your IRA and not be penalized.
Now, you will still owe income tax on that withdrawal, taxed at your ordinary income tax bracket. But here’s the thing: This provision is for people who have been affected by the coronavirus — either you’ve gotten sick, or your spouse has, or one of you has lost your job or your business has been impacted. I think this would apply to pretty much…