401(k) Loan Limits Have Doubled -- but That's Not Necessarily a Good Thing
The COVID-19 crisis is wreaking financial havoc on millions of Americans, and so in late March, President Trump implemented the CARES (Coronavirus Aid, Relief, and Economic Security) Act to provide economic relief. Included in that package is a one-time $1,200 stimulus payment for qualifying adults, extra unemployment benefits, and a set of more relaxed rules for retirement savings plans like IRAs and 401(k)s.
With regard to the latter, plan holders affected by COVID-19 can now withdrawal up to $100,000 from an IRA or 401(k) before age 59 1/2 without incurring the 10% early withdrawal penalty that would normally apply. Required minimum distributions, meanwhile, can be delayed an extra year (normally, they kick in at age 72). And those who choose to borrow from a 401(k) now have the option to take out a larger loan. But borrowing from a retirement plan is a dangerous move to begin with, and borrowing at an even higher rate could spell serious trouble for your retirement.
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Source Fool.com
