A Safer Retirement and Environment – What We’re Implementing to Help Keep You Safe: READ MORE

Here at Pivotal Financial, we are adhering to state and local guidelines in order to protect both the health and safety of clients and staff. Keeping our clients and staff safe is our highest priority and we’re taking all appropriate measures to ensure a safe environment. Should you prefer to not meet face-to-face, we are continuing to serve our clients through virtual settings such as Zoom or phone calls.

We look forward to continuing to help individuals and families achieve their ideal retirements.

Pivotal Financial
(615) 732-6212




By Ian Berger, JD
IRA Analyst

The Coronavirus Aid, Relief and Economic Recovery Act (CARES Act), signed into law on March 27, includes several important retirement-related provisions. Because some of these provisions are confusing, several misconceptions about the new law have arisen. In this edition of the Slott Report, we will attempt to set the record straight.

Misconception #1: Everyone is eligible for a CRD. The CARES Act allows individuals to withdraw up to $100,000 of IRA and company plan funds during 2020 and receive special tax breaks. These withdrawals are called “coronavirus-related distributions” (CRDs). However, not everyone is eligible to take these withdrawals and qualify for the relief. Under current rules, you are eligible only if you are in one of these categories:

  •      you are diagnosed with the SARS-CoV-2 or COVID-19 virus by a test approved by the CDC;
  •      you or your spouse or dependent is diagnosed; or
  • you experience “adverse financial consequences” on account of:

    – being quarantined;

    – being furloughed or laid off or having work hours reduced;

    – being unable to work due to lack of child care; or

    – closing or reducing hours of a business you owned or operated.

The law gives the IRS the authority to expand these categories, but that has not happened yet.

Misconception #2: Company plans must allow CRDs. Although the CARES Act allows companies to allow CRDs, companies are not required to offer them – even if you are in one of the above categories. Many plans are offering CRDs, but check with your company HR Department or the plan administrator to make sure.

Misconception #3: CRDs are tax-free. If you are under age 59 ½, your CRD is exempt from the 10% early distribution penalty. However, the CRD is generally subject to federal taxes. One of the relief provisions does allow you to spread out federal income taxes over three years. In addition, you can avoid federal taxes altogether by paying back the CRD to an IRA or company plan within three years of receiving it.

Misconception #4: Any RMD received in 2020 can be paid back. Another provision of the CARES Act waives required minimum distributions (RMDs) for 2020. This includes 2020 RMDs and 2019 RMDs if you reached age 70 ½ in 2019 and delayed your 2019 RMD into 2020.

But what if you already took an RMD in 2020 and don’t need it?  Certain RMDs can be rolled back to an IRA or company plan, but not all of them. Rollovers normally must be done within 60 days. However, if you received (or will receive) an RMD between February 1 and May 15, 2020, you have until July 15, 2020 to roll it over. But you don’t qualify for an IRA rollover if you had another IRA rollover during the 12 months before receiving your RMD. You also don’t qualify if you are a non-spouse beneficiary who received an RMD from an inherited IRA.

You are currently out of luck if you received your RMD in January of this year. But it is possible the IRS will issue broader rollover relief, so keep checking the Slott Report.


Ready To Take



For more information about any of our products and services, schedule a meeting today.

Or give us a call at (615) 732-6212

Investment advisory services are offered through Foundations Investment Advisors, LLC and is a SEC registered investment advisor.