Many Americans have struggled financially in the wake of the coronavirus crisis. The CARES Act, which was signed into law in late March to provide relief, threw retirement savers a bone in light of the financial upheaval caused by the pandemic. Specifically, it allowed savers to withdraw up to $100,000 from their retirement plans without incurring a penalty.

Generally, withdrawals taken from an IRA or 401(k) before age 59 1/2 are penalized to the tune of 10%. Under the CARES Act, that penalty is waived for qualifying withdrawals (i.e., withdrawals taken by those specifically impacted by the pandemic). But even though you may have had a good reason to remove funds from your retirement savings earlier in the year, it still pays to put that money back if you're able to do so.

Why you should try to replenish your retirement plan

Although the CARES Act waives the 10% early withdrawal penalty that normally applies to premature IRA or 401(k) distributions, it doesn't eliminate the tax burden associated with taking a withdrawal. Traditional IRA and 401(k) withdrawals are taxed as ordinary income. This applies during retirement and also as part of the CARES Act.

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The CARES Act does allow you to spread those taxes out over a three-year period, but you'll be liable for them nonetheless -- unless, that is, you manage to put your withdrawal back into your retirement plan within three years of taking it. Go that route and your tax obligation disappears.

But that's not the only reason you should attempt to replenish your savings. The other reason is that if you don't put that money back, you could face a serious shortfall by the time retirement rolls around.

The money in your IRA or 401(k) doesn't just sit there doing nothing. Rather, it's invested (or at least it should be).

Imagine your retirement plan generally gives you a 7% average annual return, which is a couple of percentage points below the stock market's average. (This assumes a stock-heavy investment mix, which you should have if you're many years away from leaving the workforce.) Let's also assume you took a $40,000 CARES Act withdrawal this year. If you're 25 years away from retirement, you won't just be shy $40,000 once your time in the workforce concludes -- rather, you'll be short $217,000 when you account for lost investment growth.

Of course, if you took money from retirement savings out of desperation earlier this year, your finances may not have yet improved to the point where you're ready to start paying that money back. But remember, you have three years to get those funds into your retirement account, so if your circumstances change for the better, that's an option worth pursuing.

While the pandemic is something most of us will probably never forget, it doesn't need to be the thing that destroys your retirement. And if you manage to replenish your savings and avoid a whopper of a tax bill, you'll come away even more unscathed.