The CARES Act is the law that brought you government stimulus checks and expanded unemployment, but there's a lot more to it than that. It also altered several rules surrounding retirement account loans and withdrawals for those who've been medically or financially affected by COVID-19. 

These rule changes have been in effect for months now, but there's still a lot of confusion about them. Only about 1 in 5 of Americans appear to understand how retirement distributions work now, according to a recent TD Ameritrade survey. That means a lot of people are putting themselves at risk of making some poor financial choices that could cost them in the long run.

Here's a look at some of the most common rule changes you should be aware of.

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You can withdraw funds penalty-free if you've been affected by COVID-19

The CARES Act temporarily suspended the 10% early withdrawal penalty on retirement account withdrawals for people under age 59 1/2 for those who have been affected by the COVID-19 pandemic. The goal was to remove barriers to their personal savings so people could use these funds to help them cover their bills in an emergency. It applies to both 401(k)s and IRAs.

Individuals who had COVID-19 or those with a household member who had the disease qualify for this penalty suspension, as do people who have lost their jobs, had their pay reduced, or had to stay home from work to care for children who couldn't attend school. 

There are drawbacks to doing this -- namely, you'll set your retirement savings back. But it's preferable to falling behind on your bills or charging everything to your credit card and carrying a balance. So if you need a little extra cash, keep this in mind.

You can spread out tax payments on withdrawals over three years

If you withdraw funds from a tax-deferred retirement account due to COVID-19, you can spread your tax liability out over three years rather than paying all the taxes in a single year like you would generally have to. For example, if you withdrew $9,000 from your 401(k), you could pay taxes on just $3,000 this year, then $3,000 next year, and the final $3,000 the year after that.

You still have the option to pay taxes all in one year if you want. This could be smarter if your income is down this year because waiting to pay some of it later, when your income might be higher, could push you into a higher tax bracket. But it's still nice to have the option to delay taxes if you're unable to pay the full bill now.

You can skip required minimum distributions in 2020

Required minimum distributions (RMDs) are the minimum amount you must withdraw from your retirement accounts, except Roth IRAs, every year. They begin at 70 1/2 if you reached this age before 2020 or 72 if you haven't. It's a way for the government to get its tax cut of your savings, but that would be adding insult to injury right now when the market downturn has already pummeled people's retirement accounts, so the government waived RMDs this year. 

You're free to take money from your retirement accounts if you want to, but if you don't need to, it makes sense to skip your 2020 RMD. It'll give your savings more time to recover and will lower your tax bill for the year. 

You can borrow up to $100,000 in 401(k) loans and pay it back over six years

The CARES Act doubled the 401(k) borrowing limits to $100,000 or 100% of your vested balance if you've been affected by COVID-19. If you choose to take a loan, you must pay back the money you borrowed with interest, but all of this goes toward your retirement savings. You have up to six years to pay back what you borrow under the new law, and any outstanding balance after that point is considered a distribution and taxed accordingly.

Not all 401(k)s offer loans, so check with your plan administrator. You also have to weigh the likelihood that you'll be able to pay back the borrowed amount within the time frame.

These rules won't affect you unless you're planning to withdraw or borrow funds from your retirement savings accounts, but if you are, understanding them can help you figure out which is the right move for you and when you'll owe taxes on your distributions. Remember to explore all of your other options and review the above information before you take any money out of your retirement account.