New 401(k) rule change to help pay for long-term care, before age 60<\/p>\n
A new change tied to your retirement account could help cover one of the most expensive and often overlooked costs families face.<\/p>\n
Under a new federal rule, some workers will be allowed to tap into their retirement savings early, without the usual penalty, to help pay for long-term medical care, even before turning 60.<\/p>\n
Federal health officials estimate that if you reach age 65, there\u2019s about a 70% chance you\u2019ll eventually need some form of long-term care. While Medicare covers many medical expenses after 65, it generally does not cover long-term care, such as help with daily activities.<\/p>\n
\t\t\t\t\t\tHow the new rule works<\/p>\n
The change allows limited, penalty-free withdrawals from retirement accounts like a 401(k) to pay for insurance that covers daily living assistance, including help with bathing, dressing or eating.<\/p>\n
Normally, withdrawing money from a 401(k) before age 59-and-a-half triggers a 10% early-withdrawal penalty, on top of regular income taxes. This new option removes that penalty in specific long-term care situations.<\/p>\n
The government already allows penalty-free early withdrawals for certain circumstances, including a birth or adoption, or some unreimbursed medical expenses. This rule adds another potential exception.<\/p>\n
\t\t\t\t\t\t5 On Your Side warning<\/p>\n
Just because the penalty may be waived doesn\u2019t mean there\u2019s no cost.<\/p>\n
Taking money out early can still mean paying taxes, and it also means less money growing for retirement over time. Financial experts recommend talking with a professional before making any decision that could impact your long-term savings.<\/p>\n","protected":false},"excerpt":{"rendered":"New 401(k) rule change to help pay for long-term care, before age 60 A new change tied to…\n","protected":false},"author":2,"featured_media":397105,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[5097,78315,28,147,530,1666,134299],"class_list":{"0":"post-397104","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-401k","9":"tag-5-on-your-side","10":"tag-business","11":"tag-personal-finance","12":"tag-personalfinance","13":"tag-retirement","14":"tag-wral-specialists"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/397104","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=397104"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/397104\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/397105"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=397104"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=397104"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=397104"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}