SECURE 2.0 Updates
Additional Early Withdrawal Options
Participants will soon have access to penalty-free early withdrawals under certain circumstances. The following provisions are now part of the RPB Plan, but implementation is still in process. We will update employers and participants once they are live.
Typically, participants face a 10% penalty for withdrawing funds from their account before the age of 59.5 if they are still working. Under Secure 2.0, that penalty will be waived if the participant is:
- Diagnosed with a terminal illness (effective immediately)
- To qualify, the participant must provide sufficient evidence of the terminal illness as required by the IRS.
- The withdrawal may be repaid within three years. If it is not repaid, the income will apply to the year of the withdrawal.
- Impacted by a qualified federally declared disaster (effective for disasters occuring after January 26, 2021)
- The participant can withdraw a maximum of $22,000 without paying the 10% early withdrawal penalty and the withdrawal may be repaid. Additionally, the participant can take out a loan of up to $100,000 (double the normal limit) and has an extra year to repay that loan.
- To qualify, the participant's primary residence must be located in the disaster area, they must have sustained economic loss because of the disaster, and the disaster must have occurred after January 26, 2021.
- A victim of domestic abuse (effective January 1, 2024)
- The participant may request a withdrawal of up to $10,000 or 50% of their account balance, whichever is less. They will have the opportunity to repay the withdrawn amount to their retirement plan over three years and will receive a refund for income taxes on the money they repay.
- To qualify, the participant can self-certify their status as a victim of domestic abuse within one year of the date they experienced the abuse.