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Use Your Retirement Plan to Pay Disaster Expenses

Thanks to SECURE 2.0, if you need money to help pay for disaster related expenses you can withdraw and/or take a loan from eligible retirement plans.


How much can you withdraw penalty free?

You can withdraw up to $22,000 without penalty. These distributions are referred to as Qualified Disaster Recovery Distributions (QDRDs). QDRDs can come from your 401(k), 403(b), governmental 457(b), and money purchase pension plans.


Can you take a loan from your plan?

You can take a loan of up to $100,000 or 100% (whichever is less) from your 401(k), 403(b), or governmental 457(b) for disaster expenses.


Who is eligible?

Survivors whose primary residence was in the disaster area and have an economic loss. There is no definition of economic loss, therefore your plan administrator will have to make the determination.


Which disasters qualify?

Federally disasters declared on or after January 6, 2021.


How long do you have to make the withdrawal?

  • The distribution must be taken with 179 days of the disaster or declaration of the disaster whichever is later.

  • Survivors of disasters declared prior to SECURE 2.0 enactment on December 29, 2022 have until June 27, 2023 to withdraw the funds.

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