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This article brought to you courtesy of Paula Walker of Confluence Law Center Gresham Outlook Estate Planning Expert.

Paula Walker

The pandemic has impacted our work life and financial climate. The government is to providing relief with two pieces of legislation, the CARES Act, (the Coronavirus Aid, Relief, and Economic Security Act) signed into law March 27, 2020, and the HEROES Act (Health and Economic Recovery Omnibus Emergency Solutions), still in review by the Senate. These Acts have provisions affecting our retirements savings plans, IRAs, 401(k)s etc., and inherited retirement accounts, specific to required minimum distributions (RMDs).

CARES, for the year of 2020, suspends RMDs, allows Roth Conversions without first taking the RMD due at the time, allows withdrawals i.e. loans, to be taken from retirement accounts, even IRAs which do not usually allow this, and waives the 10% penalty tax otherwise due for taking a withdrawal before the age of 59.5. These measures allow retirees and inheritors of their plans to use these moneys if needed or leave these investments alone for a year to benefit from the potential market recovery. IF enacted, HEROES could address gaps in CARES' handling of RMDs by suspending RMDs for all 2019 and allowing those who have already taken their RMDs in that period to roll them over to an IRA placing them back into that tax-shelter by waiving the 60-day rollover rule for 2019 and most of 2020.

The most important take-away is to consult your financial advisor and tax accountant to see if you can turn some of this pandemic mayhem into some advantage.

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Confluence Law Center, serving Clackamas, Hood River, Wasco, Deschutes, Multnomah and Washington Counties.

Confluence Law Center

24461 E. Welches Road, Suite 4

P.O. Box 964

Welches, OR 97067


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