One can take a Covid Distribution up to the end of the year, I believe December 22, 2020. You can defer the taxes up to three years before actually having to pay taxes. You can return the monies without tax liability up to the three year mark when taxes are due. I’m not suggesting using the monies to pay debt but it makes for one hell of piece of mind knowing that one has liquidity in these uncertain times and that it can be replaced without penalty. The only issue would be the lose of capital gains during the time in which the monies are set aside.

Without replacing the monies one could be potentially down 500k on average. This is over the life of ones career in the 401k just assuming a modest return (20 plus years remaining). But, depending on one’s own 401k that could be somewhat minimal based on individual saving practices and when someone started. The limit is 100k withdrawal.

This isn’t necessarily a bad deal depending on one’s own financial situation. At least it’s an option that can give piece of mind in this turbulent time. Another way of looking at it, is there no guarantee that will even make it to retirement and why not take advantage of something that we have worked our entire life’s for. I know it’s a taboo subject of never touching one’s retirement. Just a thought.