The following blog post was written by Nancy Teeven, a longstanding member of REACH’s Board of Directors.
Domestic abuse is ugly in so many ways, and much more prevalent than any of us like to think about. More than one in three women (35.6%) and one in four men (28.5%) in the US have experienced rape, physical violence, and/or stalking by an intimate partner in their lifetime. * There’s also psychological, emotional, and/or financial abuse - behaviors one exerts to control another. They are each terrible in their own way.
A lack of financial resources is one of the many reasons people stay with abusive partners. It typically takes some level of financial independence to get away, stay away, and rebuild your life once you’re on your own. Luckily, help may be available for those who have a retirement savings account.
- Survivors are now allowed to tap into their retirement savings without facing the 10% early withdrawal penalty on the distribution (though regular income tax will still factor in where applicable )
- The allowable amount is $10,000, or 50% of the person’s retirement account (whichever is less) within one year of an abusive incident.
- The survivor needs to self-certify to take a distribution.
The good news is that the definition of abuse, which can qualify an individual for this benefit, is wide ranging, reflecting the multiple ways abuse occurs: “physical, psychological, sexual, emotional, or economic abuse, including efforts to control, isolate, humiliate, or intimidate the victim, or to undermine the victim’s ability to reason independently, including by means of abuse of the victim’s child or another family member living in the household.”
The less good news is that this retirement plan provision needs to be adopted by the plan administrator at your organization as it is not mandated by law.
What does all this mean to you?
- If you are a survivor, contact your HR person and let them know you are a domestic violence survivor and need access to your retirement money. Hopefully the plan now includes this benefit. If it does not, start lobbying to get it included.
- If you are an ally and want domestic survivor colleagues to have access to what may be a financial lifeline, contact your HR department and ask them to include the SECURE 2.0 provision related to domestic abuse survivor withdrawals.
- If you are a friend or family member of somebody dealing with domestic abuse, it may be helpful to let them know about this potential benefit. You can also direct them to a domestic abuse survivor organization to learn more about other ways they can get help with their situation.
*www.thehotline.org, National Domestic Violence Hotline
