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COVID-19 put massive financial strain on many Americans, nearly overnight. According to data from GOBankingRates, 45% of Americans have nothing saved and 69% have less than $1,000. This left many with very few accessible credit options, which resulted in quickly depleting retirement savings accounts.
COVID-19’s impact on
retirement
The CARES Act provisions opened up the opportunity for retirement plan participants to withdraw from their accounts tax-free, as long as they repay the account in the designated time period. This provision closes on Dec. 31, 2020, but many plan sponsors and consultants have been counseling employees to utilize other financial resources rather than tap their retirement benefits. This can become a dangerous, and expensive, credit option because many will find it difficult to amass the required funds to put the savings back into their retirement plans.