The CARES Act and Your Retirement

What You Need to Know About the Cares Act and Your Retirement

In this article, you’ll find information about how the CARES Act impacts your retirement portfolio. Specifically what has changed regarding getting access to your retirement assets, and things to consider when making decisions about your portfolio during this unprecedented time.

A quick note: There are many items in the CARES Act and information is changing quickly. Information on this page may change over time. Either way, it’s important to consult with your financial advisor before withdrawing assets or making changes to your portfolio.


If you’ve recently been laid off or would like a second opinion, we’re offering free virtual and/or in-person meetings. Click here to schedule.

Getting Access to Your Retirement Assets

  1. If you have an IRA, you can withdraw up to $100,000 for coronavirus expenses. No 10% early withdrawal penalty.
  2. The income due to the IRA withdrawal can be paid over 3 years.
  3. You can put the money back into your IRA over 3 years with no potential penalty.
  4. If you are currently taking your Required Minimum Distributions (RMD’s), you can skip 2020’s RMD requirement.
  5. You have access to 100% of your 401k balance or $100,000 loan, whichever is less.
  6. The 2019 IRA contribution deadline is extended to July 15, 2020.

Things to Consider Before Making a Withdrawal

  1. Just because you are able to access these funds doesn’t mean you should. There are many scenarios to think about before withdrawing assets such as;
    1. What is the potential opportunity cost of those funds earning a return?
    2. Should you consider accessing other capital first?
    3. How stable is your employment if you go the 401k loan route? 
  2. What happens to your 401k loan if you are laid off? You may be forced to pay off the balance in a shorter period. If you are not able to, the remaining balance could be considered income.
  3. Can you roll your 401k to an IRA? It depends on a few factors which should be discussed. In either scenario, this should not be a taxable event if done correctly. 
  4. Should you get a 2nd opinion or portfolio review?  We see that many people don’t understand what types of risk exposure they have in their portfolios.  We can do a comprehensive analysis of your portfolio and show you other strategizes that may be better suited to your goals in today’s economic environment.
  5. You don’t want any more market risk. There are solutions with no market risk. We can discuss risk and suitability with you. 
  6. What is the best portfolio for you moving forward? As a fiduciary with no conflicts of interest, we are able to do a comprehensive review and help you determine the most suitable and risk-appropriate solutions.
  7. Please consult with your tax advisor. We share our building with a reputable CPA firm. If you do not have a CPA or an accountant, they may be a good resource to consult with.

Please keep in mind that a lot of the new rules in the CARES Act have not been completely worked out. We suspect that later in the year the IRS will issue precise guidance on many of the items mentioned above.

As a fiduciary, we feel it’s our obligation to be up to date on this information and provide updates to our clients. Having a CPA firm in our building gives us a tremendous competitive advantage as we are able to leverage their knowledge and expertise.

We are offering complimentary no-obligation Virtual Meetings, face-to-face consultations by appointment only, and phone meetings for anyone seeking financial guidance at this time. Click here to schedule.