While early withdrawals from a retirement account are normally frowned upon, but special circumstances sometimes require special needs. The unprecedented nature of the ongoing COVID-19 pandemic and resulting hardship have many participants looking for financial help. Empower Retirement put together the following list to educate individuals and families about their financial help options.
1. See if you’re eligible for a stimulus check
For people who meet the requirements, the checks will provide:
- $1,200 for single filers.
- $2,400 for joint filers.
- $500 for each qualifying child.
Visit irs.gov for qualifications and details.
2. File for unemployment
If you are unemployed, file for unemployment and apply for COBRA if your former employer offers it. The CARES Act adds an additional $600 a week to whatever benefits your state provides.
3. Evaluate your subscriptions
Review services you are signed up for and cancel them if you no longer need them.
4. See if you can delay payments
Contact your phone, internet, and utility providers to ask for help paying your bills, delay payments or set up a payment plan.
5. Check your student loan options
The CARES Act provides different options depending on the type of loan you have. Contact your loan provider or go to studentaid.gov/announcements-events/coronavirus for more information.
6. Contact your loan providers
If you have a credit card balance, auto loan or mortgage, contact the provider to ask about your options.
7. Talk to your landlord
If you rent, contact your landlord to ask for deferred payments. Remind them that their bank may be able to defer their mortgage payments.
8. If you’re over 59½, tap into your retirement savings
If you’ve already used other forms of savings, consider withdrawing money from your retirement savings account.
9. Consider your home equity
If you own a home and have equity in it, you could apply for a home equity line of credit or refinance and take cash out.
10. Think about a personal loan
Contact your bank or personal loan provider to see if you can get a personal loan.
11. Borrow from your retirement savings account
If your plan allows and you qualify:
- You may be able to take a loan from your retirement savings account. If you qualify under the CARES Act, you may be eligible to take an increased loan amount.
- You could consider taking a CARES Act withdrawal. Keep in mind the benefit of long-term investing possibilities.
- You may be eligible to take a traditional hardship withdrawal or traditional loan depending on your plan.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
