The IRS FAQ For Early Retirement Withdrawals During COVID-19


Most of us who work full time for a company (privately or self-owned) have some type of retirement plan that our employer helps contribute to. In this article, for ease of communication, we will call them 401K plans in this article, but there are many other types with various names.

Your company administrator can help you with any questions you have about your plan. During the COVID-19 pandemic, people are looking at all of their options for staying financially ahead and their retirement plans often offer a way to borrow a substantial amount of money rather quickly. Let’s take a look at this option and how it is viewed while you are in the process of filing a divorce.

Can I borrow from my 401K if I am getting a divorce? 

The easy answer is, it depends. You will need to speak to your attorney. While in most cases the retirement funds will be divided 50/50, that may not be the problem. In some states, one spouse cannot take money from the account without the signature of the other. It may not be so easy to get your “soon to be” ex, to happily sign their name so you can get up to $100K of your money to make your life easier at this time. You may have to do some bargaining to ensure it makes their life easier too. During a divorce, both of you may need some financial support and it may be an option they had not considered.

In normal circumstances, if you are younger than 59 ½ years old and you need to borrow money from your retirement funds, you are charged a 10% penalty and some steep taxes and penalties. This is to encourage you to find another way to get through your situation and leave your 401K untouched. But, a worldwide pandemic is not a normal situation and the government stepped in, to wave taxes and penalties so you can access your money fast.

The IRS answers FAQ 

Almost immediately, when the IRS published the relaxed rules, people began drawing their money out of their plans. The maximum they could draw was $100,000 and that number was requested over and over again. Read on for more information.

Below we will list some of the most common questions asked to IRS. Due to the massive number of retirement plans and the numbers of people that are involved, you may have to research your retirement plan to see where it fits. Of course, you can ask your retirement company, your retirement plan administrator, or the Internal Revenue Service for clarification.

  • You qualify if you or your spouse or dependent tested positive for COVID-19. If your life has been impacted by the pandemic (even broadly) there is a good chance you qualify. If you lost your job or a portion of your income, or if you were unable to work because of a loss of child care or even if you own your own business but had to work fewer hours due to the pandemic, you most likely qualify.
  • The maximum you can take as a withdrawal or a loan is $100,000. This is the same for ex-spouses who were awarded retirement funds belonging to a previous spouse.
  • In some cases, you will be allowed to treat the loan like a short-term loan and repay it without penalty. This is not true for all plans. Your plan administrator can advise you. If your situation in this time of a pandemic improves and you want to replace the money you took from your plan, you should expect the payments to be expensive. They are usually paid back over a period of 3-years and the payments are over $1800 per month. However, if you are in a situation where you can do this and your plan allows it, repayment puts your savings back to the original position.

Bonus hack for older employees 

During our working lives, Americans pay 6.2% to the federal-set wage base. Our employers match our contribution. When we reach the age of 67, we can begin drawing that money in monthly checks from the Social Security Administration.

Sometimes life does not follow our plans. If you are a 62-year-old employee and COVID-19 caused you to lose your job, it may not be easy to find another job right away. While you will receive less money per month, you can begin your Social Security payments early.

Now let’s say a year down the road, you have returned to work. You can contact SSI and ask them to “voluntarily suspend” your payments. Your payments will be stopped and interest will be paid into your SSI account. If you begin your SSI payments when you have reached the age of 66-years and 2-months, your payments will be within a few dollars of the original plan amount.

This does not restore you to your original position, but it gets you very close. It also allows the person who is retiring to control their own destiny. Some people do not want to retire early. They want to plan their own lives around the schedules of their families and loved ones. The few dollars they return to their SSI may or may not make a difference to their quality of life.

Regardless, it is their choice to make. This option allows them to do just that. Make their own choices. This just might be the option you need to allow you to get through this difficult time with a little less stress.

Didn’t Get Around To a Prenuptial Agreement? How About a Postnup?

Prenuptial Agreement

There was a time when the only people who got a prenuptial agreement before they married were people of substantial means and/or people of great popularity. In the past decade, we have seen more people requesting prenuptial agreements than ever.

Couples who did not manage to obtain a prenuptial agreement, are arranging a postnuptial agreement in the early stages of their marriage. This is not about trust or love. It is about business and security. There is a saying, “When you marry someone, you marry the whole family.” A quick search of the internet will show you, there is truth to that saying. How well do you know the family?

Why are things changing?

People are waiting to get married. These are the millennials. They are securing their careers, establishing credit, buying homes, and investing. While they are not financially secure for life yet, they have begun and they have their eye set on the target. Their goals will probably be adjusted so that both spouses can live comfortably while saving the maximum.

By now, they probably have discovered which of the two is the best at saving, watching for sales, and making do, and which spouse runs through the mall, credit card in hand  shouting “CHARGE!” They have lived long enough to have seen marriages that have ended in divorce and the devastation. As much as they love their new spouse, they feel obligated to secure the properties and heirlooms handed down to them for their children.

The difference in a Prenup and a Postnup

By now you understand that a prenup takes place before the wedding and a postnup takes place after the wedding. Either of them need to happen under the eye of an experienced attorney. The reason for this varies. All prenups and postnups are dictated by state laws. The laws are not always the same, and if the wrong state laws are used to draw up your agreement your agreement can be ineffective. This is also a good reason to stay away from “do-it-yourself” internet plans. If your postnuptial agreement is in violation of any of the state laws, the judge may throw it out. Standard things listed in a postnuptial agreement.

There are many things to go over on this agreement. Even if you think your spouse is being fair, all items must be gone over with your attorney. Below are some basic things listed on a postnuptial agreement for a family of upper-middle-class standards.

  • Agreements you have worked out between yourselves before the divorce or separation process and before litigation begins
  • Fairness matters
  • Any plans for one parent to staying home with young children after working to secure financial assets (note: this normally comes up where alimony is a consideration)
  • Children are not part of this – they are hands-off in this deal
  • Inheritance for children from prior relationships including grandparents
  • Simply to clarify how to separate assets
  • Have separate attorneys
  • When one party is financially irresponsible after the marriage

Note: Before the wedding, each spouse should have an inventory taken of what they own, and deeds showing when they got it. If these items are to be kept by one spouse, all monies need to be kept in a private account. Expenses for the properties must come from that account. If the money for upkeep comes from the household money, it can be argued that it then became a household property.

When your postnuptial agreement becomes void

When you have hired an attorney and have legally prepared a detailed postnuptial agreement, there is little cause for concern. But, some people have attempted to go outside the lines only to find out they wasted their time. Here are some examples:

  • Your agreement was oral
    • You go to court and tell the judge that the agreement was spoken and the two of you agreed upon X, Y, Z. The judge has no way to prove that and it will usually (almost always) be thrown out of court.
  • Your spouse agrees that he or she agreed to the oral requirements, but it was out of fear. They felt you were a danger to them or their children, so you said what you wanted to hear. This will not work in court and could result in additional charges.
  • You did not provide full disclosure. You have assets in investments, cash, or property that you did not claim when filling out the paperwork. All property must be counted.

Prenuptial agreement and Postnuptial agreement are part of life. It is a way to feel safe and not to feel like you are trapped if the marriage goes south. It gives everyone a level playing field. You have no reason to think your spouse is using you for money. You can focus on building your lives in other areas and that will ensure you will have a beautiful life.

Tips to keep Long-distance relationship during Coronavirus lockdown

Long Distance relationship

Romance should alive all the time. Love should be shared every day. With the rise of coronavirus pandemic, doctors and medical experts urged the public to stay away. Social distancing was the term used to educate masses to keep a distance while meeting. Travel was banned in many countries, while the public was restricted to their homes. It poses a great challenge for people that were in a long-distance relationship.

People who were in long-distance relationship sometimes forced to remain apart. The worst thing is that they even don’t know how long it will continue. It was ok till changing the lifestyle and plans but travel restriction has made it almost impossible for couples to meet.

People who were in a long-distance relationship know how to spend time without seeing each other. They know better how to keep the romance alive for many days without meeting. However, with little expectancy about the duration of lockdown, it is creating problems for even them. They don’t know when and how will they meet. It is quite difficult for them to keep their love charged.

There are a lot of things that couples should do to keep the romance alive, love bond strong and self-improvement. They should openly talk about their concerns with the other partner. Discussing missing each other is a good thing.

Life may be looking very strange nowadays. However, there are many things to do to ease the pain of keeping apart. Texting, calling and video chats are not enough. Here we will discuss some tips that will help you to keep your bond strong with your partner.

Listen to beautiful songs

listen to same musicSongs are a great way to know about your feelings. Many people go in-depth with the songs. You should keep listening to the songs that were loved by both of you. Your first song together, the songs on which you danced together, his/ her favorite song and several others. When you keep listening to these type of songs, you will feel better about the other partner.

Cook the Same meal

family cooking during lockdown

This is the perfect thing to do in the lockdown. While many people are utilizing the quarantine time to polish their cooking skills, it is a great idea to enhance romance. Select a meal and cook at the same time as your partner. A video call will be a nice idea to not only keep in touch but also experience the same fun.

Watch the same TV show/ movie


If there is something on TV that you both like, it is a good idea to watch it together. A movie that inspires you both is also a good idea. After watching the movie, share your thoughts with the other partner. Listen to their views about the show or the movie. It will help you a lot in keeping the conversation active.

Send romantic videos to each other

This is another good idea. Videos are a nice way to express what you are feeling. When you send a romantic video to your partner, that person actually feels you near them. Make a routine to share the best romantic movies with your partner. If the other person is also sharing his/ her favorite content with you, it is working in your case.

Visit the same place virtually

With the latest tech, it is not necessary to visit a place in person. There are a lot of options available online to do so. Navigate in the Google Maps, watch videos on YouTube, surf website and explore the same place with your partner. Discuss the things you liked the most and ask about their liking.

Plan a trip after the lockdown

Lockdown will end sooner or later. It is a good idea to plan a trip in advance. Be it your favorite restaurant, favorite park, food street, shopping mall or any place, plan for it. Discuss it. Share related pictures and remain prepared to visit that place as soon as the pandemic ends.

Play a game together

This is an awesome idea if both of you like the same game. Being on the opposite side, playing the same game is the best thing to refresh the love between both of you.

Master the dirty talk

When you can’t meet, dirty talk is your strongest weapon. Be it chat, voice notes, audio call or video call, use it wisely. Keep the conversation alive.

Talk about your favorite memories

No one knows when the pandemic will end. Talking about your favorite memories will keep the chat active. It will also let the other person know that you care about the beautiful time both of you spent together.

Send sweet notes

Be it morning and night wishes or romantic quotes, it is important. Send them time to time to your partner so they know that you are very important in their life. It is a nice way to tell them that you are missing everything.

Shannon Anderson

Shannon Anderson

Shannon Anderson is a licensed professional counselor and a national certified counselor and owner and clinical director of Tender Hearts Child Therapy Center in Cape Girardeau.

She and several therapists at the center specialize in treating child and adolescent mental health issues in Southeast Missouri and work with parents using family therapy to develop parenting/discipline skills to deal with misbehavior and defiance.

In her blog Shannon provides education on children’s mental health topics and uses a question-and-answer forum for local parents to ask questions related to hers field. Shannon can be reached at