Be CAREful when taking retirement withdrawals under the CARES Act
The CARES Act passed last spring made it easier for taxpayers to take hardship withdrawals from an IRA, 401(k), or 403(b) plan during 2020. The CARES Act waives the 10% penalty for early withdrawal and allows you to pay the federal income taxes on the withdrawal over 3 years.
As this article points out, however, there may be better options than tapping into retirement savings. The CARES Act allowed homeowners with Freddie Mac or Fannie Mae mortgages to suspend payments. There are opportunities for small businesses funding through SBA loans and state and local grants. Be CAREful and consider other options before tapping into retirement savings, because withdrawals now mean less money for retirement in the future.