Has a CARES Act retired? Right here is why it is best to attempt to return it to Private Finance
The CARES Act allows you to spread these taxes over a three year period, but you are still liable for them – unless you manage to get your payout back into your retirement plan within three years of taking it. Go this route and your tax liability will disappear.
However, this is not the only reason you should try to replenish your savings. The other reason is that if you don’t put the money back you could face a serious deficit by the time you retire.
The money in your IRA or 401 (k) doesn’t just sit there doing nothing. Rather, it is invested (or at least it should be).
Imagine that your retirement plan generally gives you an average annual return of 7%, which is a few percentage points below the stock market average. (This assumes a stock-intensive mix of investments, which you should have if you are many years away from the workforce.) Also, let’s say you made a $ 40,000 withdrawal under the CARES Act this year. If you’re 25 years away from retiring, not only will you be shy of $ 40,000 when your time on the workforce is up, but you’ll run out of $ 217,000 when you factor in lost investment growth.