With so many Americans struggling financially due to COVID-19, Congress has passed three emergency packages to respond. As we recently detailed, its third effort, the CARES Act, includes sweeping measures to help a wide cross section of Americans.
The CARES Act expands access to retirement funds, providing a critical lifeline to those struggling to make ends meet.
The Act allows eligible participants to withdraw up to $100,000 from their retirement savings throughout 2020. It waives the 10% tax penalty that normally applies to early withdrawals. Income attributable to these withdrawals may be spread over three years or recontributed to an eligible retirement plan within three years. And for a limited time, plans may permit eligible participants to borrow up to $100,000 or 100% of their savings and delay loan repayments for up to 1-year.
Eligible participants are those diagnosed with the coronavirus, who have a spouse or dependent diagnosed, or those:
We often highlight the importance of saving for retirement, and clearly tapping into these savings should be a last resort, especially given the current market conditions. However, for those struggling to make ends meet, these options can help keep their heads above water financially.
Just as life insurers are meeting the moment in aiding their local communities, many are also helping policyholders who need emergency access to their retirement accounts, including:
Whatever challenges COVID-19 poses, life insurers stand firmly committed to helping communities, policyholders, and lawmakers overcome them.
Susan K. Neely was President and CEO of the American Council of Life Insurers (ACLI), the nation’s leading trade association determined to help families live better lives by achieving financial security and certainty. As president and CEO, Neely drove public policy and advocacy on behalf of ACLI’s member companies that represent 93 percent of industry assets and serve 90 million families. She is CEO Emeritus through December, 2024.
