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MTA Program News: January 2021

When it comes to planning for your financial future, you don't have to go it alone.

Whether you have any questions about the topics below, how to use a certain plan feature, want to measure your financial wellness progress, or just need some personalized assistance to help set your financial goals—you have a direct line of access to Prudential retirement counselors, who are listed at the end.

Repaying Your Coronavirus-Related Distribution (CRD) and Important Tax Considerations

If you were eligible and took a CRD from your MTA Deferred Compensation Program account under the CARES Act, please review information below regarding your repayment options.

  • If you choose, you can generally repay any portion of a CRD that is eligible for tax-free rollover treatment to an eligible retirement plan. Contact a Prudential retirement counselor for a form and assistance.
  • You have up to 3 years from the day after the date you received the distribution to make a repayment.
  • The amount of your repayment cannot be more than the amount of the original distribution.
  • The repayment is treated as a direct rollover and can be paid into any eligible plan or IRA that allows a rollover contribution. You do not need to make the repayment to the same plan or IRA it came from.   
  • If your plan has any existing restrictions on the receipt of direct rollovers (e.g., for terminated participants or spousal beneficiaries), these restrictions will also apply to CRD repayments.

In addition, please be aware of the following tax considerations associated with your distribution.

  • Generally, IRS guidance (Notice 2020-50) indicates that the taxable portion of the distribution is includible by you in income in equal portions over the 3-year period – 2020, 2021, and 2022 – unless you elect to include the entire amount in income in 2020.
  • Upon repayment, a form will need to be completed and the tax return(s) for the year(s) that the distribution was included in income will need to be amended and refiled.
  • IRS guidance indicates that taxpayers should use Form 8915-E to report any repayment of a coronavirus-related distribution and to determine the amount of any coronavirus-related distribution includible in income for the tax year.
  • Please work with your tax advisor to determine how to report the repayment on your personal income tax return because Prudential associates cannot provide legal or tax advice.

How do the pieces of your retirement income 'puzzle' fit together?

Understanding how all your sources of retirement income will work together is an important step in visualizing your retirement. For most people, their income sources will include:

  • Social Security (view your statement at ssa.gov)
  • Pension
  • Voluntary retirement savings, including the MTA Deferred Compensation Program's 401(k) and 457 Plans.

Once you have a solid understanding of how all of the pieces of your retirement income fit together, you can plan for the future with more confidence.

The Retirement Income Calculator is a valuable tool, available through Prudential Retirement's participant website, designed to help you determine if you're on track to meet your retirement income goals. The calculator can be used to model different contribution scenarios. Using your age, desired retirement age, and how you are investing—combined with your retirement account information—it estimates how much income you'll need to save for retirement. It will also estimate how much you will NEED to save to reach that desired level of retirement income. You can then create an Action Plan based on the target of your financial goals. For help, you can also set up a personal walkthrough of the tool by contacting a counselor.

Virtual One-on-Ones

Schedule your virtual session with a Prudential retirement counselor for a time that works for you—and attend from wherever you are. All you need is a phone and an internet-connected device (we recommend using a computer) to access your private, secure online meeting room. Below are the counselors with the locations they typically covered prior to the pandemic; however, you may contact any one of them for assistance.

Learn moreGetting the most out of your retirement plan

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Participants using the Retirement Income Calculator should consider other assets, income and investments (e.g. equity in a home, Social Security benefits, individual retirement plan investments, etc.) when assessing the adequacy of the estimated income stream as provided by this tool. The Retirement Income Calculator is hypothetical and for illustrative purposes only and is not intended to represent performance of any specific investment, which may fluctuate. There is no assurance that retirement income objectives will be met. It is possible to lose money by investing in securities.

This material is intended to provide information only. Neither Prudential Financial nor any of its affiliates provide tax or legal advice, for which you should consult your qualified professional.