The SECURE 2.0 Act that went into effect in March 2022, makes it easier for qualified individuals impacted by a federally declared major disaster to access their retirement savings. This is good information to have should you be affected by a disaster and need that access. The IRS provides the following important information.
Who is eligible
A taxpayer may be eligible for relief that provides for expanded access to their retirement funds if their principal residence was in a major disaster area and sustained an economic loss due to that disaster. An economic loss includes, but is not limited to:
- Being displaced from the taxpayer’s principal residence.
- Loss or damage to or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause.
- Lost income due to temporary or permanent layoff.
Use the tool on FEMA.gov/Disaster to find a current list of major disaster declarations.
Types of relief
These types of disaster relief are available to people who qualify:
- May withdraw up to $22,000 from an IRA or other eligible retirement plan.
- Amount exempt from the 10% early distribution tax.
- May repay to a retirement plan or IRA within three years of the distribution.
- Distribution may be included equally in income over three years.
- A retirement plan may offer increased loan limits and delay repayments.
If you have questions, contact your R&A advisor.
More information
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