At the end of 2008, President Bush signed into law the Worker, Retiree and Employer Recovery Act of 2008. The purpose of this Act is to allow people who are 70 ½ or older to forego taking out required minimum distributions in 2009.
Due to the downturn in the stock market, many retirement accounts have been greatly reduced. Being forced to take out their minimum distributions in 2009, could further devastate significantly reduced retirement accounts. This new law allows you to keep your retirement accounts invested to (hopefully) reap the rewards of an upturn in the market in 2009.
In 2009 Required Minimum Distributions are suspended; Retirees who attA In the age of 70½ in 2009 can forego their 2009 Required Minimum Distribution; and Beneficiaries of a deceased worker's Retirement Plan who are subject to the 5 year rule can also forego Required Minimum Distributions in 2009, thereby extending the 5 year withdrawal period by 1 year.
If you are subject to the Required Minimum Distribution rules you should consult with your attorney, accountant and financial planner to see if it makes sense for you to forego your 2009 Minimum Distribution.
If you have questions on this subject or any other tax issue, please call one of the attorneys at 216-245-0185.