Before You Take an Early Retirement Plan Withdrawal Because of COVID-19, Do This

The COVID-19 crisis is hitting Americans hard. Whether you've lost your job, your income has decreased, or you're grappling with higher expenses, you may be desperate to increase your personal cash flow right about now. And that could mean raiding your retirement plan early.

Thanks to the CARES Act, which was passed in March to provide relief during the pandemic, it's now possible to withdraw up to $100,000 penalty-free from an IRA or 401(k) if you've been affected by the crisis. Normally, taking a withdrawal before age 59 1/2 results in a 10% penalty on the sum you remove, and that's money you can't get back. But right now, that penalty is waived if your need for cash stems from COVID-19's impact.

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Source Fool.com