2020 IRA and 401(k)/403(b) Plan Changes – The “Cares Act”

As we continue to study the stimulus package passed last week, we will continue to send relevant information.

This legislation provides a few provisions changing some of the rules for IRAs and retirement plans. It is important that you read this and schedule a call with us if you would like to discuss or make any changes since your RMDs may be set on automatic distribution.


  1. For 2020, all RMDs are suspended, including those for inherited IRAs as well as traditional IRAs of those over age 70½. We will want to make sure that suspending the distribution makes sense from a tax perspective based on your tax bracket. It might make sense to take the RMD out of the IRA if you’re in a low or zero tax bracket.
  2. If you already took the 2020 RMD, you will have to include it in your tax return. The RMD distribution can be reversed. You have up to 60 days from the withdrawal date to return the distribution to the IRA without owing taxes. You may also want to consider converting the amount to a Roth.
  3. The deadline for making a 2019 contribution to an IRA is extended to July 15, 2020 to match the tax filing deadline.
  4. The 10% penalty for taking early distributions from qualified retirement plans, including IRAs and 401(k)s, is waived on the first $100,000 of distributions. The waiver applies to distributions received between January 1, 2020, and December 31, 2020. Withdrawal amounts over $100,000 will incur the 10% penalty.
  5. INCOME TAX IS STILL DUE ON A DISTRIBUTION. If applicable, you may pay income taxes over three years on a coronavirus-related distribution. You also have up to three years to recontribute the amount to a plan or IRA. An in-service distribution from a qualified retirement plan also is permitted if it is coronavirus-related.
  6. Also provided were two types of 401(k)/403(b) (“qualified plans”) loan relief:
    1. Plans may allow eligible participants to take loans up to the lesser of $100,000 or 100% of the participant’s vested account balance for the specified period.
    2. Upon the request of an eligible participant, plan sponsors must suspend loan repayments due on outstanding loans that are in good order for a period of up to 12 months. This relief expires on December 31, 2020. The suspension period is to be added to the original loan term when repayments, including accrued interest, resume, regardless of the length of the loan’s original term.

We will continue to provide you with important and relevant information.



Doug Eaton

Partner and Chief Investment Officer


Douglas J. Eaton, Accredited Investment Fiduciary ®, CPM ®, CWS ®, CDFA ®

Fiduciary Planning, LLC/dba Eaton Financial Group

3111 North University Drive, Suite 404, Coral Springs, FL 33065

Mobile: (917) 509-2306 | Office: (954) 575-9323 | Fax: (954) 573-6546

Advisory services offered through Fiduciary Planning, LLC Inc. an SEC Registered Investment Adviser.  Securities offered through Sorrento Pacific Financial, LLC,  (“SPF”) Registered Broker/Dealer. Member FINRA/SIPC.  Fiduciary Planning, LLC is a separate entity from SPF.  CA Insurance License #: 0F59779

The information contained herein should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security, insurance product or investment advisory services. All investments include a risk of loss. Past performance is no guarantee of future results, and there is no guarantee that future investments will be profitable. For more information please contact Fiduciary Planning or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov) to review our Form ADV Brochure.