Aging In Michigan - April 2020

COVID Changes Retirement Plan Options for 2020

The “CARES Act” is what the government has named the massive COVID-19 stimulus plan recently passed by Congress and signed by the President. It has many parts. Some of those parts impact what you can do with your retirement plans (like IRAs and 401ks) in 2020.

Here is a brief summary:

No Withdrawal Required

Nobody will be required to take a Required Minimum Distribution (“RMD”) in 2020, regardless of your age or the nature of your retirement account. Of course, there is nothing that precludes you from taking a distribution (required minimum or otherwise) if you are eligible to do so.

More Time to Contribute

Because the date for paying your 2019 taxes was extended until July 15, 2020, the deadline for putting money into your retirement account in 2019 was extended too. You have until July 15, 2020 to make a contribution to a retirement plan and thereby reduce your 2019 taxable income.


If you have a COVID related reason (and those reasons are defined very broadly),  you can borrow up to $100,000 from your retirement account, even if that’s all you have in it. You will still have to pay it back, but the period for repayment is extended too.


Again, if you have a COVID related reason, even if you have not reached retirement age, you can withdraw up to $100,000 from your retirement plan with no penalty. You will still have to report the withdrawn amount as income in 2020, but the 10% early withdrawal penalty is waived.

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