Emergency Cash Option in Virus Law Has Major Strings Attached

Cracking open retirement accounts to claim the $100,000 in emergency cash authorized by the new stimulus law could compound a leakage problem that already shrinks lifelong assets up to 25%.

Benefits professionals say individuals should avoid taking advantage of a perk with short-term benefits that diminish over time. Some fear the most vulnerable, such as low-income families in desperate need of a boost, may never recover from inopportunely burning through their scant assets.

“This is the last thing in the world you want to do,” said Boston College’s Center for Retirement Research Director Alicia Munnell, whose research, ...