If you pulled money from your 401(k) plan or individual retirement account last year to get through tough times, now is the time to consider next steps.
The federal CARES Act that was passed in March 2020 put in place very favorable terms for qualified retirement plan participants under the age of 59½ to tap their nest eggs without incurring the usual 10 percent penalty. Plan participants could withdraw up to $100,000 from their accounts and recognize it in income over a three-year period for tax purposes. They were also given three years to replace the withdrawn money to the account without any penalties or taxes owed.
