A withdrawal from your 401k could impact your stimulus control
We went to the president and CEO of a Rockville-based wealth management company to get some answers.
WASHINGTON – President Joe Biden enacted a $ 1.9 trillion COVID relief plan that includes $ 1,400 stimulus checks for many Americans. Congress gave final approval to the “US bailout” on Wednesday, before it was signed by the president on Thursday.
The House and Senate versions of the bill have agreed that individual filers who earn up to $ 75,000 per year will receive $ 1,400. Couples who jointly deposit up to $ 150,000 will receive $ 2,800. There will also be $ 1,400 added for each dependent in the household.
The White House said some people may start seeing those direct payments hit their accounts as early as this weekend. Now that the third stimulus check is on its way to Americans’ bank accounts, we’re answering your questions.
RELATED: Third Dunning Check: Updated Schedule for $ 1,400 Payments
HAVE A QUESTION YOU WANT OUR TEAM TO ANSWER? SEND US A TEXT AT (202) 895-5599.
Q: A viewer texted us and asked us: If she pulls out of her 401k plan and her income exceeds the maximum income threshold in 2020, does that make her ineligible for a stimulus check?
We went to the president and CEO of a Rockville-based wealth management company to get the answer.
A: Unfortunately, the answer would probably be yes. A withdrawal that would increase your income beyond these thresholds would make you ineligible.
“They count the adjusted gross income, which is $ 75,000 for an individual and $ 150,000 for a couple,” said Kendall Capital President and CEO Clark Kendall. “So if you make a withdrawal, it’s considered part of that adjusted gross income. So unfortunately that’s going to work against the individual.”
Q: In difficult financial times like the one we experienced during the pandemic, is it a bad idea to retire from your 401k?
A: “I think the worst case scenario is that you had to take money to pay rent or buy food in the last year – probably for a lot of people it could mean, at worst, having to work. an extra year to make up that contribution, ”Kendall said. “This crisis can be managed, I think we all need to keep it in perspective. “
Getting out of your 401k isn’t the end of the world, but Kendall says to look at other options first, like taking out a personal loan, a home equity line of credit, or even borrowing from friends or the home. family.
Download the WUSA9 app here.
Sign up for the Get Up DC newsletter: Your forecast. Your commute to work. Your news