A new law has made it easier for Americans to tap their 401(k)s and other retirement accounts for emergencies as they continue to battle high inflation.
A new law will make it easier for Americans to use their 401s and other retirement funds as an emergency ATM. Under new IRS rules, Americans can now withdraw up to $1,000 from their 401s without any penalties if the money is needed to cover a financial emergency. Acceptable reasons for a withdrawal include medical care, funeral expenses, auto repairs or "any other necessary emergency personal expenses.
THE 'MAGIC NUMBER' TO RETIRE COMFORTABLY HITS NEW ALL-TIME HIGH There are some exceptions. You cannot take out so much money that you leave your account balance below $1,000. And the emergency withdrawal is optional for employer plans, meaning that not everyone will be able to participate. The change comes as a growing number of Americans tap their 401s for emergency purposes amid stubbornly high inflation that has rapidly eroded workers' purchasing power.
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