Based in Oradell, New Jersey, Steven S. Maher has guided Maher Financial Services as president for more than three decades. The areas in which Steven S. Maher works with clients include retirement and tax planning. He has also given numerous seminars about these topics over the years.
For those requiring extra cash to tide them over in uncertain economic times, there are a number of options on the table. For those with 401(k)-type programs and individual retirement accounts (IRAs), one option is a permanent withdrawal. However, this has the significant drawback of taking investment funds out of circulation that might be used in later stages of life. In addition, taxes are assessed on the amount withdrawn, and there is typically an early withdrawal penalty as well. The recently passed CARES Act changes this arithmetic somewhat, with the 10 percent early withdrawal penalty for those under age 59.5 removed.
A better option for those with 401(k)-type plans may be to take out a loan that can be repaid over time, without penalties or taxes being triggered. Under new CARES Act rules, 401(k) participants who have been directly impacted by coronavirus disruptions can now borrow as much as $100,000 from their accounts. This includes the whole vested account balance, as long as employers agree. This essentially doubles previous limits.
For those requiring extra cash to tide them over in uncertain economic times, there are a number of options on the table. For those with 401(k)-type programs and individual retirement accounts (IRAs), one option is a permanent withdrawal. However, this has the significant drawback of taking investment funds out of circulation that might be used in later stages of life. In addition, taxes are assessed on the amount withdrawn, and there is typically an early withdrawal penalty as well. The recently passed CARES Act changes this arithmetic somewhat, with the 10 percent early withdrawal penalty for those under age 59.5 removed.
A better option for those with 401(k)-type plans may be to take out a loan that can be repaid over time, without penalties or taxes being triggered. Under new CARES Act rules, 401(k) participants who have been directly impacted by coronavirus disruptions can now borrow as much as $100,000 from their accounts. This includes the whole vested account balance, as long as employers agree. This essentially doubles previous limits.
