There will be changes to a lot of retirement plans due to the pandemic. Here’s what you should know….(read more)

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Money Monday: Coronavirus retirement plan changes

The ongoing coronavirus pandemic has had a significant impact on the economy and many individuals’ finances. For those who are retired or planning for retirement, the current situation may raise some concerns about their retirement savings and investments. However, there are several retirement plan changes that have been implemented as a response to the pandemic that may help alleviate some of these concerns.

One of the key changes that has been made to retirement plans in light of the coronavirus pandemic is the suspension of required minimum distributions (RMDs) for 2020. Typically, individuals over the age of 72 are required to take a minimum distribution from their retirement accounts each year. However, this requirement has been waived for 2020 in order to help retirees who may not want to sell investments in a down market in order to meet their RMD obligations. This change can help individuals preserve their retirement savings and potentially avoid locking in losses during the current market volatility.

Additionally, the CARES Act, which was passed in response to the economic impact of the coronavirus pandemic, has introduced several other changes to retirement plans. For example, the act allows individuals affected by the pandemic to take penalty-free withdrawals of up to $100,000 from their retirement accounts. This can provide much-needed financial relief for those who are facing economic hardship as a result of the pandemic.

Furthermore, the CARES Act has also extended the deadline for making contributions to individual retirement accounts (IRAs) and health savings accounts (HSAs) for the 2019 tax year to July 15, 2020. This extension can give individuals more time to make contributions to their retirement accounts and potentially reduce their tax liability for the year.

Overall, the retirement plan changes that have been implemented in response to the coronavirus pandemic can provide some relief for individuals who are concerned about their retirement savings. By taking advantage of these changes, retirees and those planning for retirement can better navigate the current economic uncertainty and protect their long-term financial security. As always, it is important to consult with a financial advisor or tax professional to understand how these changes may impact your individual retirement plan.