The CARES Act Lets You Borrow More From Your 401(k) -- but Your Employer May Not
The Coronavirus Aid, Relief, and Economic Security (CARES) Act aimed to provide financial relief by, among other things, making it easier for Americans to borrow money from their 401(k) tax-deferred retirement accounts. Under the CARES Act, the limit on 401(k) loans was doubled from the lesser of $50,000 or 50% of the vested account balance up to the lesser of $100,000 or 100% of an employee's vested account balance.
However, while the legislation allowed employers to offer larger loans from retirement accounts, it didn't require them to do so, and many have opted out. According to recent research from Ascensus, just 8.5% of employers have adopted the expanded loan options, so many workers won't be able to tap into their retirement funds as much as they'd hoped for if they're facing financial troubles related to COVID-19.
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Source Fool.com
