After striking a deal in the early hours of Wednesday morning between Senate Republicans, Democrats and the White House, the U.S. Senate on Wednesday moved toward a vote on an historic stimulus bill aimed to relieve economic stress for Americans affected by the outbreak of the COVID-19 coronavirus. The bill will reportedly relax some of the rules in place that govern the tapping of retirement savings, according to CNBC.
Described as the product of a “marathon set of negotiations” between the parties by the New York Times, the bill aims to deliver an unprecedented $2 trillion in economic relief for businesses which have been forced to close their doors, individual American workers who are facing unemployment or enhanced economic hardship along with additional aid for hospitals that are under intense pressure to provide care for the increasing numbers of people afflicted by the disease resulting from coronavirus infection.
The most recent version of the bill contains several provisions that are specific to issues related to retirement savings. In 2020, a retiree will be able to take a coronavirus-related distribution of up to $100,000 from a retirement plan or IRA without the normally-included 10% early withdrawal penalty if they are under the age of 60, while the bill also reportedly relaxes rules around retirement plan loans, allowing you to borrow up to double the previously-allowed amount – a maximum of $100,000 – from a 401K plan.
Additionally, for retirees who would normally take the required minimum distributions from their plans, they can now waive those requirements for the remainder of the year. This will allow those in or near retirement to stretch their savings further while the economy mounts its recovery once the worst of the coronavirus crisis is past.
Previously, a person who was at least 70½ years of age would be required to take annual mandatory distributions from workplace retirement plans and/or IRAs, but starting in 2020 that age has risen to 72.
The size and scope of the new relief bill more than doubles the size of the $831 billion American Recovery and Reinvestment Act of 2009, passed by Congress and signed into law by President Barack Obama at the beginning of his presidency in response to the 2008 financial crisis.
While a group of four Republicans held up action on the Senate’s Wednesday vote, Majority Leader Mitch McConnell (R-Ky.) still hoped to schedule the vote for Wednesday evening. Speaker of the House Nancy Pelosi (D-Calif.) hoped to pass the bill by unanimous consent Thursday after its expected passage in the Senate, clearing the way for the signature of President Donald Trump which would codify it into law.
Read the retirement-centric article at CNBC.
