There is no question that a global pandemic had a significant impact on almost every aspect of life. From finances to shopping to entertainment and even exercise and mental health, the pandemic turned almost everyone’s way of life in its head, often in a number of overlooked and undervalued ways. People that may have previously resented a long daily commute may suddenly have come to miss it when they no longer had to drive to work. People that previously resented all of the distractions that working in an office created may have come to miss the camaraderie and fellowship of working shoulder-to-shoulder with their coworkers.
One of the many aspects of life that changed for many was their retirement picture. Thanks to both the generous stimulus to the economy provided by the Federal government, in addition to a mass exodus from large cities into smaller communities as well as a sudden surge in demand for a number of different services, many people suddenly found themselves in a vastly better financial situation than they had been just a year earlier. As a result, millions of Americans made the decision to retire early. On the other end of the spectrum, however, millions of Americans also found themselves having to dip into retirement funds to keep themselves, and in some cases their businesses, afloat.
Due to the suddenness of these changes in fortune, many people may have failed to consider the long-term tax implications of their decisions regarding retirement or their retirement funds. In some cases, people decided to retire early due to the combined factors of being laid off from their job and suddenly seeing their financial picture skyrocket. Once businesses begin to get back on track again, they may have found themselves being courted by their former company, which raises the question of what happens when someone has officially retired and then decided to rejoin the workforce? In other cases, people may be expecting huge tax penalties as a result of dipping into retirement funds.
Thankfully, the IRS has issued a great deal of guidance on how to navigate tax season when it comes to Coronavirus-related financial issues. In addition, the Federal government is well aware of just how many Americans had to suddenly dip into retirement funds and make generous allowances in the CARES Act.
“Some information on this website was written by BrandYourself, a non-affiliate of Cetera Advisors LLC” Megent Financial – Ron Whittingham, Investment Executive & Eric Burton, Investment Executive.”