Retirement savings withdrawals change under CARES Act.

Close up of a 401(k) statement.


The CARES Act, the legislation just signed into law by President Donald Trump, contains plenty of provisions for those saving for and living in retirement. But experts say those who can take advantage of the new law have lots to consider.

The law temporarily loosens the rules on hardship distributions from retirement accounts, giving people affected by the crisis access of up to $100,000 of their retirement savings without the usual 10% penalty.  

The law also doubles the amount 401(k) participants can take in loans from an account for the next six months to the lower of $100,000 or 100% of the account balance. IRAs don’t permit loans. 

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The new rules apply to a whole range of people, including those who have lost a job because of the pandemic, those suffering from COVID-19 or who have a spouse with the virus.

Close up of a 401(k) statement.

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If your emergency savings fund is running low, it may make sense for you to use your 401(k) to ride out the COVID-19 pandemic, says Keith Whitcomb, the director of analytics at Perspective Partners. “The CARES Act is designed to enhance this financial alternative,” he says. 


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