COVID-19 has caused millions of people to lose their jobs, which is affecting some Americans’ ability to save for retirement.
Since March, more than 30 million Americans filed unemployment claims as the United States shed an unusual 20.5 million jobs. The unemployment rate jumped to 14.7 percent in April.
This is the highest level of unemployment America has seen since the Great Depression. If you find yourself unemployed, it’s natural to think about accessing 401k funds to make ends meet.
Normally when you draw money out of a 401k or another qualified retirement account, such as an individual retirement account or IRA, Chris Porter with PorterKinney said if you are not 59 and a half years-old, you would pay a ten percent penalty of the distribution. Porter said not only do you pay taxes when you receive that money from retirement, but you also pay that 10 percent penalty.