Friday, December 26, 2008

Required Minimum Distributions for 2009 Suspended

"A day late and a dollar short." ~ idiom

Congress OKs bill to help retirees protect savings plan by Sandra Block in USA Today, report that Congress has passed a bill, H.R. 7327, to suspend Required Minimum Distributions (RMD) for 2009. RMDs currently must be taken taken from tax deferred retirement plans beginning in the year one turns 70 1/2. Suspending RMDs will allow retirement accounts time to recover some for the losses of 2008, before a withdrawal of funds is made.

RMDs are typically based on the the value of the retirement accounts on December 31 of the previous year, making 2008 RMDs were particularly painful since many accounts are much lower than the December 31, 2007 value. Therefore, suspending the 2008 RMDs would have been the most helpful legislation for retirees, which, unfortunately, Congress has not done.

A bill, H.R 7315, was introduced on December 9, 2008, to suspend 2008 RMDs retroactively. However, the bill is still in committee has not gone to vote.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2008 Achievement Catalyst, LLC


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