Required Minimum Distribution (RMD) Withdrawals Suspended in 2009.

Volatile market conditions in 2008 precipitated changes to some retirement account rules. As a result, President Bush signed HR 7327, the Worker, Retiree and Employer Recovery Act, into law in December 2008.

This legislation allows investors to leave their money in retirement accounts and creates financial planning opportunities for advisors. HR 7327 suspends Required Minimum Distribution (RMD) Withdrawals for the calendar year 2009, temporarily removing the 50% penalty on withdrawals not taken or distributed. The legislation also impacts the five-year rule by effectively extending required payments by one year when beneficiaries have elected this option. Additionally, if an IRA owner attains age 701/2 in 2009, his technical required beginning date is April 1, 2010. No RMD for 2009 is required to be made under this legislation, therefore the first RMD would be for 2010 and paid no later than December 31, 2010. Finally, the legislation does not impact RMDs taken or currently due for 2008.  If you have questions on this important rule change, please let us know.



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