A massive relief bill is coming to Americans amid growing coronavirus fears. President and CEO Cathy DeWitt Dunn spoke with WFAA about what’s in the $2 trillion stimulus bill and how it will help consumers and the economy. She addresses tackling debt, dealing with bills and even making large purchases following her breakdown of the stimulus package and what it means to America as a whole.
The $2 trillion stimulus bill includes provisions that are designed to help Americans leverage their retirement accounts to get through the financial effects brought on by COVID-19. According to the bill text, the provision provides relief to individuals “who would otherwise be required to withdraw funds from such retirement accounts during the economic slowdown due to COVID-19.”
If you are 70 1/2 or older, you may be able to take advantage of a waiver for RMD (Required Minimum Distributions). This waiver allows you to forgo your 2020 RMD without penalties. The RMD waiver also applies to IRA and Roth IRA beneficiaries who have 2020 RMDs. If you are younger than 59 1/2, you can take an early distribution, up to $100,000 without a penalty, from a traditional IRA to pay for a coronavirus-related hardship, such as job loss. The early distribution is penalty-free, though not necessarily tax-free. The plan gives you 3 years to replace these funds before taxes on the withdrawals occur. If you cannot replace the funds in 3 years, you will be given an additional 3 years to pay off the taxes on your withdrawal.
If you have any questions about the stimulus plan or strategies to protect your financial health, reach out to our team at (972) 473-4700 or fill in our online appointment form here to schedule a video meeting.