A Safer Retirement and Environment – What We’re Implementing to Help Keep You Safe: READ MORE

Here at Chadmere Capital Inurance and Financial Services, we are adhering to state and local guidelines in order to protect both the health and safety of clients and staff. Keeping our clients and staff safe is our highest priority and we’re taking all appropriate measures to ensure a safe environment. Should you prefer to not meet face-to-face, we are continuing to serve our clients through virtual settings such as Zoom or phone calls.

We look forward to continuing to help individuals and families achieve their ideal retirements.

Chademere Capital Insurance and Financial Services
(803) 242-1050



By Ian Berger, JD
IRA Analyst

The recently-enacted Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed by President Trump on March 27, 2020, allows “qualified individuals” to take up to $100,000 of penalty-free IRA and company plan withdrawals during 2020. “Qualified individuals” include those who are (or whose family members are) sickened by the virus or who have virus-related adverse financial consequences.

But what if you are lucky enough not to be a “qualified individual,” but still have extraordinary bills to pay? You should always look first to other non-retirement plan savings to pay your expenses. Any IRA or company plan savings you tap into will mean less available funds at retirement. The next source of savings should be your IRAs. IRA withdrawals are easier and faster than company plan distributions.

The last resort should be your company plan accounts. If your plan offers loans, you may want to consider that option. You can borrow up to 50% of your account balance, but no more than $50,000 (minus any outstanding loans). Plan loans don’t require a credit check, and the application process is normally simple and quick. In addition, a plan loan isn’t a taxable distribution, and repayments are made back to your account – not to a bank.

However, borrowing against your account reduces the tax-deferred savings that you may need for retirement. And, if you terminate employment with an outstanding loan, you may be taxed on the entire outstanding loan balance.

If your plan doesn’t offer loans or you don’t want to take on more debt, you should check to see if your plan offers in-service withdrawals. Many plans offer withdrawals for any reason at age 59 ½ and hardship withdrawals at any age.

Generally, hardship withdrawals are allowed if you can satisfy one of the IRS “safe harbor” criteria. These include medical expenses, educational expenses, payments necessary to prevent eviction or mortgage foreclosure, and burial or funeral expenses. Also included are expenses and losses (including the loss of income) incurred on account of a disaster if you live or work in a FEMA-designated disaster area. Every state has now been designated a disaster area because of the coronavirus. So, you should be eligible for a disaster hardship withdrawal if your plan allows them. However, keep in mind that any hardship withdrawal cannot be more than is necessary to pay your financial expense.

Any withdrawal of pre-tax accounts will be taxable and, if you are under age 59 ½, will normally be subject to the 10% early distribution penalty.

As with loans, if considering a withdrawal, you must carefully weigh the need for these funds against the loss of tax-deferred growth in your savings plan account.


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