Planning for, investing in, and safeguarding your retirement nest egg during normal conditions can be a challenging task.
Add a global health crisis with COVID-19, economic recession, and record unemployment to the mix – thinking about your financial future can be downright scary.
Not to worry. There’s good news to ease your fears when it comes to your TSP and retirement savings strategy.
If you have a TSP, you may have noticed that several temporary changes started under the CARES Act at the end of March. These changes give you options to reduce possible financial loss and risk during these difficult times.
Required minimum distributions (RMD) and COVID-19
The negative impact of COVID-19 on both the economy and individual finances led Congress to pass a benefit in the CARES Act.
The change doesn’t require you to take the previously mandated RMD withdrawal in the 2020 calendar year. Plus, automatic RMD payments have been suspended for 2020. You’re eligible for this benefit regardless of your age or employment status.
There are specific rules about stopping the life-expectancy RMD installment payments and rolling 2020 disbursements back into any eligible retirement plan. Plus, there are also particular rules about repayment terms for non-RMD withdrawals and loans.
How federal employees can qualify for COVID-19 relief
To qualify for a loan and withdrawal program, you must meet these eligibility requirements:
- You, your spouse, or dependent have been diagnosed with COVID-19 by a CDC-approved test.
- You, your spouse, or a member of your household are experiencing adverse financial consequences from COVID-19 as a result of:
- Being quarantined
- Having work hours reduced
- Being furloughed or laid off
- Experiencing a reduction in pay
- Being unable to work due to lack of childcare availability
- Having a job offer rescinded or a delayed job start date
TSP loans and withdrawals in the CARES Act
Federal employees signed up for a TSP and qualified for COVID-19 relief can take advantage of temporary loan and withdrawal programs offering tax deferment and repayment options.
Suspension of notarized documents
If you decide to take advantage of a COVID-19 loan or withdrawal program, you don’t have to get any forms notarized until further notice.
Keep in mind…
This info can change as new info and guidelines become available. It can also change as new and revised options are included in the HEROES Act which is planned to be enacted in August.
Your retirement options
Not sure how COVID-19 may impact your retirement? Or, not sure which option may be best for you and your retirement goals? Send us an email at info@MyFederalRetirementHelp.com , give us a call at 877-733-3877 x 1 or Contact UsFollow us on Social Media: