Comparing 401k CARES Act Withdrawals to Regular 401k Withdrawals: Is Taking a 401k Withdrawal Right for You?

401k CARES Act withdrawal limits have been updated in response to the CARES Act recently signed into law updating 401k withdrawal limits. CARES Act 2020 401k Withdrawal Updates - Effective March 27, 2020, you can take a 401k CARES Act withdrawal of up to the lesser of $100,000 or 100% of your vested 401(k) Plan account balance. You also have the ability to take a hardship withdrawal from the 401(k) plan that is exempt from the normal 10% early withdrawal penalty and repayable within three years. Some of the Pros of taking 401k loans and hardship withdrawals include: Instant capital can be received from your 401k retirement account with very minimal effort. Most 401k plans offer online 401k hardship withdrawals that can get you money within a matter of a few days with no credit checks, impacts to your credit, or a lengthy application process. Another benefit of the 401k CARES Act withdrawal is the fact that the money can be used for anything, although it is highly suggested that you create a plan for how to use a 401k withdrawal properly to get the most bang for your buck. Eliminating high-interest debt, especially high-interest credit card debt is one of the best uses for 401k hardship distributions. Some of the Cons of taking 401k withdrawal Include: Borrowing money from your 401k is also taking money away from your future to pay off past debts or to support your current lifestyle. Taking a look at your entire financial picture, including your spending habits will help you determine if a 401k withdrawal is right for you. Lastly, the money that you take from your 401k will not be able to benefit from capital appreciation or dividends. This potential loss in investment gains could be devastating in the long run, so you should make sure that all of these factors are discussed when determining is a 401k CARES Act withdrawal right for me? In summary, if your planning on using a 401k CARES Act withdrawal to consolidate debt or pay off high-interest debt then 401k withdrawals can be a great alternative to traditional financing. Just make sure you read your 401k plan documents thoroughly and have a plan for exactly what you're going to do with your 401k withdrawal proceeds. 0:00 - Intro 1:17 - What is a 401k withdrawal 2:46 - What are the consequences of taking a 401k withdrawal 6:42 - 401k CARES Act Withdrawal 7:34 - What can 401k withdrawal funds be used for 8:13 - What are the consequences of taking a 401k CARES Act withdrawal 10:41 - Who is eligible to receive a 401k CARES Act withdrawal 12:05 - Outro ******************************************** My Video Creation Gear: ******************************************** SUBSCRIBE to the channel to stay updated anytime new videos are posted: ******************************************** Becoming Financially Fit Blog: ******************************************** Social Media: Facebook: Instagram: Twitter: LinkedIn: YouTube: ******************************************** #401kWithdrawal #401k #401kCARESActWithdrawal...(read more)

---

LEARN MORE ABOUT: 401k Plans
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing

---

In the wake of the COVID-19 pandemic, many Americans have suffered financial difficulties. As a response to the crisis, the CARES Act was signed into law, allowing individuals with 401k plans to withdraw funds without penalty. However, before taking a withdrawal, it is important to understand the difference between a CARES Act withdrawal and a normal 401k withdrawal. A normal 401k withdrawal occurs when an individual takes money out of their retirement account before reaching the age of 59 and a half. In these situations, there is usually a penalty fee of 10% in addition to the income tax owed on the amount withdrawn. On the other hand, CARES Act withdrawals allow individuals facing certain coronavirus-related hardships to take out up to $100,000 from their 401k plan without penalty or tax if repaid within three years. This waiver of the 10% penalty fee applies to all individuals, regardless of age. While it may be tempting to take a CARES Act withdrawal, it is important to consider the long-term effects on your retirement savings. A 401k withdrawal, whether under normal circumstances or through the CARES Act, will reduce your overall retirement savings, and could also hurt your ability to take advantage of future stock market upswings. Additionally, if the withdrawn amount is not repaid within the allotted three years, taxes will still be owed on the amount taken out. Before making the decision to take a 401k withdrawal, it is important to evaluate all other options and weigh the potential consequences. Consulting with a financial advisor can also provide valuable guidance on the best course of action based on individual circumstances. In conclusion, while the CARES Act provides relief for individuals struggling financially during the pandemic, it is important to carefully consider the implications of taking a 401k withdrawal. Withdrawing from your 401k may provide immediate relief but may create long-term consequences for retirement savings. Personal circumstances and long-term financial plans should be evaluated before making the decision to take a 401k withdrawal of any kind. https://inflationprotection.org/comparing-401k-cares-act-withdrawals-to-regular-401k-withdrawals-is-taking-a-401k-withdrawal-right-for-you/?feed_id=107423&_unique_id=64893558b8e36 #Inflation #Retirement #GoldIRA #Wealth #Investing #401k #401k #401kcaresact #401kcaresactwithdrawal #401khardshipwithdrawal #401kwithdrawal #401kwithdrawal2020 #401kwithdrawalcaresact #401kwithdrawalexplained #401kwithdrawalpenalty #401kwithdrawalpenaltycovid #Borrowingfrom401k #caresact401k #caresact401kexplained #caresact401kwithdrawal #caresact401kwithdrawalexplained #caresact401kyoutube #hardshipwithdrawal #hardshipwithdrawal401k #howtocashout401kundercaresact #Retirement #401k #401k #401k #401kcaresact #401kcaresactwithdrawal #401khardshipwithdrawal #401kwithdrawal #401kwithdrawal2020 #401kwithdrawalcaresact #401kwithdrawalexplained #401kwithdrawalpenalty #401kwithdrawalpenaltycovid #Borrowingfrom401k #caresact401k #caresact401kexplained #caresact401kwithdrawal #caresact401kwithdrawalexplained #caresact401kyoutube #hardshipwithdrawal #hardshipwithdrawal401k #howtocashout401kundercaresact #Retirement