From the Trenches: An Update of Retirement Account & SDIRAs with New Direction Trust

ICOR Blog & News,

As with most of the country, New Direction Trust is undergoing significant changes as a result of COVID 19. First and foremost, as an “essential business” we need to let people know we are open and fully operational. Over ninety percent of our employees are now working from home which is a significant change for us. Normal day to day business has slowed, but new accounts are being opened, and clients continue to invest in alternative assets using their retirement accounts.

With that in mind, we want to highlight some key pieces of information related to the CARES Act that was just passed by Congress. The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), is a $2 trillion dollar stimulus package designed to offer financial flexibility to a nation of taxpayers in the throes of the COVID-19 pandemic. The CARES Act introduces new tactics to build upon a series of measures that have been introduced since the health crisis began. The CARES Act has several items that relate to retirement plans, and most importantly offers ways to access retirement funds for those impacted by the Coronavirus. Below are some key things to be aware of, and we encourage people to visit for detailed information.

  • The U.S. government has moved the tax filing deadline to July 15th, which also extends 2019 retirement plan contributions to July 15th.

  • 2020 required minimum distributions waived– An account holder who would otherwise need to take a required minimum distribution (“RMD”) this year needn’t take one in 2020. Under normal circumstances, anyone age 72 or older who holds a Traditional IRA, 401(k), or another such pre-tax plan would be subject to annual RMDs.
  • 10% penalty on early distributions for COVID-19 expenses waived– An early distribution would generally incur taxes and an additional 10% penalty unless said distribution qualifies as a “hardship” distribution. Expenses related to COVID-19 (which include indirect expenses such as loss of income or COVID 19 related medical expenses) fall under the hardship category by virtue of the CARES Act, meaning an early distribution of up to $100,000 for this purpose would not subject the account holder to the 10% penalty.
    • Those who keep the distribution(s) can pay the applicable taxes over the next three years, or
    • Account-holders can re-contribute the distributed balance over the next three years to avoid the tax burden.
  • 401(k) loan provision doubled – 401(k)s uniquely allow their holders to borrow money from and eventually repay their accounts. 401(k) holders may now borrow up to $100,000 under the CARES Act, which is double the standard limit of $50,000.
    New Direction Trust Company is committed to serving the ongoing—and evolving—needs of your investment goals and of your self-directed IRAs, HSAs, and 401(k)s. We will continue to monitor any additional changes that are implemented as a result of COVID-19.

Please don’t hesitate to give us a call at 877-742-1270 or send us an e-mail at