Your retirement savings may be accessible without incurring a penalty if certain conditions meet specific criteria, including medical issues or unanticipated life events or emergency needs.
The 10% penalty is designed to discourage early withdrawals from 401(k) plans and IRAs; however, the IRS recognizes that unanticipated financial circumstances may arise and grants an exception in such instances.
Military Reservists
Military reservists are an invaluable part of a country’s armed forces. When called upon during wartime, these professionals provide cost-effective manpower resources.
RAND research supports policy decisions related to military reservists in numerous ways, such as how best to document and optimize force utilization, attract, retain, and engage reservists in military service.
The Army Reserve offers you an exciting way to experience life while serving in your spare time, from 18-43. Discover all of its unique opportunities and experiences available through Find the Reserve in You virtual event series. Meet Army Reserve Soldiers like craft distillers and scholarship-winning math teachers; these individuals are living their passions and advancing in their careers while remaining part of our military community.
Rollovers
Rollovers refer to the transfer of assets from employer-sponsored retirement plans, such as 401(k)s or 403(bs), into another eligible plan or an IRA. While indirect transfers are most frequently undertaken, direct transfers into another account may also be accomplished.
Rollovers must be completed within 60 days of receiving their distribution; however, there is an exemption from this requirement when receiving distributions from qualified plan loan offset accounts. For more information refer to Publication 575 Pension and Annuity Income.
DOL and SEC regulations both mandate fiduciaries to use a documented process when making recommendations that are in the participant’s best interests for rollover recommendations. PTE 2020-02 from DOL provides this procedure; SEC also details a similar best interests standard in its 2019 Investment Adviser Interpretation. Both processes take into account costs; levels of services; features of existing plans/IRA accounts recommended and other factors when determining whether an offer is in fact beneficial to participants.
Disaster Relief
Individual decisions and actions before and after disaster events have an immense effect on their effects; therefore, contemporary disaster relief must encompass ethics alongside practicality and stewardship.
Humanitarian aid can be broken down into four distinct phases: preparation, disaster response, response recovery and recovery. At each phase of disaster relief individuals can be involved as donors, recipients, volunteers aid workers or governments – potentially all simultaneously.
IRS rules allow 401(k) plan participants who reside in areas affected by federally declared disasters to withdraw funds without incurring the 10% early withdrawal penalty. Affected individuals include individuals residing or conducting business within a disaster area who experienced economic losses as a result of disaster, along with individuals working for government or philanthropic agencies assisting disaster areas – these people also qualify for tax relief under these provisions. For more information, visit the IRS Tax Relief in Disaster Situations page and stay up-to-date on recent FEMA declarations by staying up-to-date through news releases from FEMA declarations and updates from FEMA declarations.
Domestic Abuse
Abuse takes many forms. Physical abuse is easily identifiable; emotional abuse, however, may be less so. Emotional abuse might include insults and public shaming in public settings that make you feel stupid; manipulating you into staying; using patterns of behavior to manipulate you into staying. Abuse may also include controlling money or access to bank accounts; destroying property without permission or threats against either yourself or your children; withholding access to pets and restricting attendance at work/school attendance.
Domestic abuse affects men and women of any age, ethnicity or socio-economic level – whether in heterosexual relationships, same-sex partnerships or family relationships both current and past. It takes place both between partners as well as between family members.
Starting in 2024, victims of domestic abuse can withdraw up to $10,000 (indexed for inflation) without incurring the 10% penalty from their retirement plan without self-certifying. You can combine both exceptions but must take one emergency withdrawal each year.
