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Financial Health, Products & Services

CARES Act IRA Updates

With the CARES Act you have until July 15, 2020 to make 2019 IRA contributions, plus the Act waives the 10% early withdrawal penalty for distributions up to $100,000 for Coronavirus-related purposes, retroactive to January 1, 2020.  In addition, the Required Minimum Distributions from IRAs and 401(k) plans (at age 72) are suspended.

Woman and man discussing IRA for tax advantagesThere have been many changes over the past few weeks, one of which is the 2019 tax filing deadline. To help Americans respond and recover from the impacts of COVID-19 the Federal Government has pushed back tax day 90 days until Wednesday, July 15, 2020.

This change also means Americans have three more months to make prior year IRA catch up contributions. This means you may be able to reduce your 2019 tax burden by putting away some additional funds towards your retirement savings; however, we recommend you consult your tax advisor for more details.

In addition, the Coronavirus Aid, Relief and Economic Security Act or the CARES Act has also made the following provisions for Individual Retirement Accounts:

  • The IRS is waiving their 10% Early Withdrawal Penalty for distributions up to $100,000 for distributions taken between January 1, 2020 and December 31, 2020 that are being used for “coronavirus-related” purposes.
  • The IRS has suspended Required Minimum Distributions for 2020. All IRA participants that were required to take an RMD in 2020 are no longer being required to take that RMD during the 2020 calendar year.

At OlyFed, we take great care to keep our customers informed about their accounts and with so much volatility in the stock market, it’s good to remember we offer safe and secure tax-advantaged IRA accounts insured by the FDIC. Even better, you’re guaranteed to earn interest and your results are 100% predictable. This peace of mind investing can take the stress out of your long-term planning and savings.

To help you reach your goals and needs, you might consider laddering your IRA accounts so they mature at different, sequential dates in the future. This strategy may help you earn more interest while providing access to your funds as the IRAs mature.

For more information, please contact Katelyn Anderson, our Savings & Retirement Specialist at kanderson@olyfed.com or call (360) 754-3400.

 

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