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Required Minimum Distributions Suspended for 2009
Almost everyone's portfolios have taken a hit in 2008 with the slowdown in the economy. The recently-passed Worker, Retiree and Employer Recovery Act helps individuals who must take required minimum distributions (RMDs) from their retirement accounts. The Act suspends RMDs for 2009.
A RMD is the amount that an individual must take from his or her qualified retirement account on an annual basis over the course of his or her life expectancy after retirement. Generally, distributions must begin not later than April 1 of the year following the year in which the individual retires or attains age 701/2 . The RMD rules are intended to prevent individuals who have no current need for the funds from extending the tax subsidy for retirement savings indefinitely.
The suspension applies to all qualified defined contribution plans, including 401(k), 403(b), 457(b) and IRA accounts. The suspension will allow seniors to keep more of what's left of their tax-deferred retirement savings intact until the markets rebound.
If you have any questions about RMDs and the Worker, Retiree and Employer Recovery Act, call C&G today at 262-522-8227.
CIRCULAR 230 DISCLAIMER -
To ensure compliance with Treasury Regulations governing written tax advice, please be advised that any tax advice included in this communication, including any attachments, is not intended, and cannot be used, for the purpose of (i) avoiding any federal tax penalty or (ii) promoting, marketing or recommending any transaction or matter to another person.
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