Coronavirus stimulus bill offers relief for retirees

Retirees and pꦚre-retirees considering tapping their qualified retirement a✱ccounts to survive tough times just got a tax break.

The recently passed $2 trillion stimulus law that are designed for anyone “who experiences adverse financial consequences as a result of being quarantined or being f🦄urloughed.”

The laꦺw provides tax reduction benefits for those who need to borrow from retirement accounts — such as 401(k)s and IRAs — that qualify for tax deferral, as well as for retirees who are required to take money from accounts each year and now worry about selling in a market crash.

Retirees won’t be required to take minimum distributions this year — analysts say that’s a good thing because they will benefit from deferral. The longer one delays usi🧜ng retirement funds, the more they can compound. Compounding, advisers say, is critical in achieving a retirement goal.

Retirees ages 70 to 72 can now wait a year to take a required minimum distribution from a🐲 qualified plan. This gives their beat-upꦗ accounts extra time to recover.

Those not yet retired, who need cash to survive, can withdraw up to $100,000 without the normal 10 🍰percent penalty that attaches to premature withdr🅰awals before age 59 ¹/₂. But the loan must be paid back within three years.

But Salli✱e Mullins Thompson, a Manhattan financial planner, said to avoid borrowing fro𝔍m a retirement account.

“The enhanced unemployed benefits would be at the top of my list. Max those out first, along with any emergency fund savings, before raiding your retirement plan,”𒐪 Thompson said.