Ask Bob: Is It Possible To Withdraw Money From A Pension Under The CARES Act?
Robert Powell, CFP®
I am retired and receive a pension from a police and firefighters pension. Under the CARES, am I allowed, to withdraw from my pension during the COVID-19 time?
If you have a pension but aren't currently receiving benefits from it, then generally, no, a withdrawal can’t be made, says Rick Fingerman, CFP, CDFA, CCPS, managing partner of Financial Planning Solutions. “If that is the case, I'd say no as a pension is not the same as a retirement plan like a 401(k),” he notes.
Jim Werner, CFP, vice president of Halliday Financial, recommends you contact the human resources benefits office or pension plan coordinator. “Each pension plan is different, and although the CARES Act provides guidance to help people with financial hardship, the pension plan would need to be amended by the plan trustees to accommodate the reader’s request.”
Werner also notes that the pension is one benefit, and there’s also the possibility that you may have access to a defined contribution retirement plan such as a 457, 401(k), or 403(b) retirement plan. “The CARES Act provided guidance for plan trustees to make changes to the withdrawal and loan rules,” he notes. If there is a need for a distribution, you should also ask the plan trustees or HR benefits office if your employer changed the withdrawal or loan rules for these types of accounts.
Got questions about Social Security, Medicare, retirement, investments, or money in general? Get answers. Email Robert.Powell@Maven.io. Kim McSheridan assisted with this report.