Now May Be a Good Time to withdraw $100K from Your Retirement Accounts, Penalty-Free!
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Q. My wife, Patty, and I are in our late 50’s and have been hit hard by COVID-19. Luckily, neither of us got the virus, but financially, we have been struggling. I got furloughed from my job and Patty teaches yoga, and the yoga studio where she teaches, like so many others during this pandemic, had to close completely, so neither of us has had any income for months. We own our home and a vacation
home, but we have almost used up our emergency savings. I have a traditional IRA of 250K and Patty has a 403(b) in the amount of $150K from a previous employer. We are both healthy, yet we are seeking Medicaid planning advice (mostly to protect our home and our vacation home) at a time when it seems likely we can get beyond the five year look back period with relative ease. Due to the provision in the CARES Act regarding penalty-free withdrawals of up to $100K from an IRA per person, we are
considering withdrawing $100K each from our IRAs to help make ends meet.
Is it a wise idea for us to take advantage of the $100K per person withdrawal from our traditional IRAs? It is my understanding that the $100K withdrawal in calendar year 2020 avoids the 10% penalty for early withdrawal, and would also allow us to stretch the amount over 3 years for income tax purposes. For my wife and I, does it have any implications as far as Medicaid planning goes? Are there
any other reasons not to do it? Thanks for your help!
Critter Corner: Extra Financial Assistance for Caregivers at This Time
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I am a caregiver for my aunt who has dementia, and who is also a veteran. I used to work part-time in addition to caregiving, but lost my job during the COVID-19 pandemic. Do you know of any extra financial assistance programs during this time? Thanks for your help!
Order Books by Evan Farr, 4-Time Best-Selling Author
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Certified Elder Law Attorney and Medicaid Asset Protection Expert, Evan H. Farr, CELA, has written four best-selling books in the field of elder law. For more information and to order, click here.
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