Bohemia, NY (PRWEB) December 13, 2012
On December 13 2012, Savings2Income comments on the special rules available to victims of Hurricane Sandy who need additional funds for storm-related costs.
According to the US News article, the IRS has relaxed its rules on retirement savings plans to help victims who live in the disaster area. These retirement savings plans include your tax deferral plans like 401(k)’s, 403(b)’s, 457(b)’s and Thrift Savings Plans, reports the article. Additional rules state that those who live outside of the disaster area can withdraw funds from their 401(k) plans to assist with immediate family members that were affected as well.
The articles states, “these Sandy-related hardship withdrawals must be made by Feb. 1, 2013.” The article continues, “However, early withdrawals from 401(k) plans may come with significant costs.” The article explains these costs include regular income tax on these distributions and early withdrawal penalties for those victims under the age of 59 ½ based on existing rules for retirement plans. 401(k) loans will also be available to hurricane victims and the limits of those loans are based upon each retirement plan.
US News continued to state that retirees will have additional time to enroll in 2013 Medicare by contacting Medicare directly. Retirees can also visit their closest Social Security office to request immediate payments if any were missed because of Hurricane Sandy.
Jerry Golden, founder of Savings2Income, commented, “While I applaud the liberalization of the hardship rules, I also understand the challenge for the IRS in waiving the tax and penalty. It may be, however, that the losses from the storm damage might offset the taxes due on the hardship withdrawals. It does suggest, however, the need for a ‘rainy-day’ (and was this ever one) fund help outside of a 401(k) or other plan that investors can draw on more freely. Overall, it’s wonderful to see possible solutions in a time of hardship caused by Hurricane Sandy.”
An innovative retirement planning method called Savings2Income (S2I) created by Jerry Golden seeks to provide a clear path to retirement security for those saving for retirement, soon to retire, and recently retired. S2I incorporates Rollover IRA savings, personal retirement savings held outside an IRA or 401(k) plan and Social Security into an integrated solution.