Early 401(k) Withdrawals in 2020

We covered 401(k) loans a few weeks ago, but there’s another way to access money you’ve put away in your 401(k) ahead of schedule: an early withdrawal. Usually this is a last resort since you’d not only pay taxes on that withdrawal, but an additional 10% penalty on top of those taxes. The 2020 CARES Act (the Coronvirus economic relief package) changed that. You can now withdraw a limited amount early with no extra penalty. But should you? The answer is complicated; you need to consider the additional taxes you’ll owe, other sources of short term cash, and how much you really need. If it’s something you’re considering read the full story here and chat with one of our coaches first.