• Sun. Aug 14th, 2022

The number of people taking early withdrawals related to Covid-19 is lower than expected

Jan 20, 2021

Workers affected by the pandemic continued to withdraw money from their retirement accounts in the final months of 2020. But, as happened earlier in the year, the increase in the number of people taking withdrawals was modest.
Congress in late March let people pull as much as $100,000 from individual retirement accounts or 401(k)-type plans by Dec. 31 without the 10% early-withdrawal penalty that generally applies under age 59½.
Not many took that option.
In 2020, Fidelity Investments, the nations largest 401(k) provider, said 1.6 million people, or 6.3% of eligible participants in plans it administers, took some money out.
Fidelity and many other 401(k) record-keepers reported that although the number of people taking Covid-19-related withdrawals continued to grow in the final three months of 2020, the rate of increase was modest and largely in line with what occurred in earlier months, even as the option to take a penalty-free withdrawal ended on Dec. 31.