I wonder if those who accept the voluntary LR package can qualify for the $100,000 401k early no penalty distribution ?
https://www.irs.gov/newsroom/coronavirus-related-relief-for-retirement-plans-and-iras-questions-and-answers
2 replies (most recent on top)
Before taking a distribution from your 401k, I would speak with a financial adviser. Obviously they will say NO, but they only look at it from a numbers game. I took a distribution from my former employer's 401k while moving it to my new FA. We did a comprehensive retirement review. The best decision was to switch to a 15 year mortgage, take a $25k distribution ($2.5k penalty), and regain from there. Only you know your situation. A distribution now may add 10 years to your life because of unnecessary stress. You have to decide that and make it work for you.
Based on that article, the 10% additional tax on early distributions does not apply to any coronavirus-related distribution. What i thought was interesting is that you could spread that distribution out across 3 years. That was news to me, certainly interesting