Coronavirus Aid, Relief and Economic Security (CARES) Act
The CARES Act is intended to bring relief to
those impacted by the coronavirus pandemic. It also has significant implications for
your retirement planning. While the Act is aimed at helping you in the short-term,
be sure to understand the long-term impacts to your overall financial picture. Talk
to a financial professional about your specific situation.
Please note: Contact us to learn more about which
CARES Act provisions your plan has adopted.
List of
temporary provisions in the CARES Act
Provisions intended to give some financial relief
include:
- Emergency stimulus checks
- Student loan modifications
- Relief from evictions due to nonpayment of rent
- Enhanced unemployment benefits
- Delayed tax payments
- Emergency paid leave
- Emergency sick leave
Think about these forms of relief before taking
money from your retirement plan, and potentially negatively impacting your
retirement readiness. Decisions like this can be difficult; we're here to explain
the options so you can determine what's best for you and your family.
The CARES Act and your retirement
We recognize that accessing your Retirement Plan
Savings could be an option for you at this time. For any COVID-19 related requests,
we will waive or reimburse any Nationwide-imposed fees for all loan initiation,
distribution or hardship withdrawals for you, if you are in a plan where those fees
may apply. This will be effective from March 27 (when the CARES Act was signed)
through December 31, 2020.
Please call us if you need to access funds or
have questions. Our Solutions Center team members will continue to ensure
extraordinary care and are ready to assist you with your COVID-19-related
distribution request.
The CARES Act and loans
For new loans, the current retirement plan loan limits
are doubled to the lesser of $100,000 or 100% of your vested account balance.
For new and existing loans, payments due in 2020 can be
deferred for one year.
This provision only applies to plans who currently
allow loans and have adopted this provision of the CARES Act. Check with us to
see if your plan allows them.
If you're thinking about taking money from your
retirement plan, we have a detailed FAQ for you explaining what you should
know.
The CARES Act and retirement
savings
The Act will allow for tax-favored withdrawals
up to $100,000 and:
- The additional 10% early withdrawal tax is waived
- You’ll have up to three years to pay income taxes
on the withdrawal
- You can repay all or a portion of the distribution
within three years; the repayments are not subject to contribution limits
The CARES Act and Required
Minimum Distributions
(RMD)
The CARES Act waives RMD payments for
retirement plans and IRAs due in calendar year 2020.
Please note: Contact us to discuss
your RMD
status.
An extension has been granted to both the SECURE and
CARES Act RMD rollover periods for certain distributions from plans and IRAs to
August 31, 2020.
- If you received your RMD from January 1, 2020 -
July 2, 2020 you can roll it over at any point up to August 31, 2020.
- If you received your RMD on July 3, 2020 or
thereafter you can roll it over within 60 days from the date of receipt.
Things to remember
about your retirement planning
Any loans or withdrawals could impact your
retirement nest egg. Never lose sight of the long-term impact they can have on your
retirement. History tells us the markets will return, and if you take yourself out
of the market now, it may prevent you from benefitting from future upside.
It’s important to weigh all available options to
address your immediate financial needs while still being thoughtful about your
future financial wellbeing.
We exist to protect
people, businesses, and futures with extraordinary care
We know these are difficult times, and we’re
here to help if you need access to funds. We will work with you and your employer /
Plan Sponsor to help you take advantage of the CARES Act provisions, when offered by
your plan. We also will be here to help you make informed decisions about retirement
planning.