Just because you can do this, doesn’t mean you should.

As part of the CARES Act, Congress approved a change to let people withdraw up to $100,000 from their 401(k) or IRA accounts this year without having to pay the typical 10% penalty for people under the age of 59½. The move was designed to help people weather the economic impacts of the Covid-19 crisis.
Some people are looking at taking advantage of this penalty waiver to pull funds from their qualified accounts to invest outside of that umbrella in riskier securities. Many investors are trying to cash in on the industries and companies that have suffered from the Covid crisis. Retirement savings are meant to be long term investments, not short term gambles. Remember that even though the penalty is waived, you will still have to pay income tax on the withdrawal.
Investing for your retirement should be the primary use of your 401(k) or IRA. Gamble with outside dollars.


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