Bills are piling up for many people during the coronavirus outbreak, but tapping retirement savings to pay them is a bad idea. Certified financial planner lizweston explains:
I do not qualify for a coronavirus hardship withdrawal, but I have debt on several credit cards with interest rates above 23%. In 2019, I paid nearly $2,500 in interest charges. I would like to remove $10,000 from my IRA and use it to pay off the debt. I would then put the money that would normally go toward the credit card debt to pay back the IRA.
People who take such withdrawals would have the option of putting the money back within three years. If they can repay the money, they could amend their previous tax returns to get a refund of the taxes they paid on them.If you don’t qualify for a coronavirus hardship withdrawal, then the rules on taking money from your IRA haven’t changed.
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