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Legislative Up-Date

Penalty Waived for Retirees for Mandatory Withdrawals in 2009

01-07-2009

Thousands of older Americans who are legally required to take distributions from their shrinking retirement savings accounts will get a break in 2009.

Legislation has been signed that will temporarily waive the penalty on adults age 70 1/2 and older who don't withdraw their annual minimum required distribution from their retirement accounts in 2009.

The law places a one-year moratorium on those penalties for IRA's, 401(k)'s and 403(b)'s, so that older people aren't forced to take their withdrawals from savings plans that have incurred dramatic losses.

Typically, the penalty for failing to take the annual required distribution is 50 percent on the amount that should have been withdrawn.

This one year moratorium also applies to beneficiary IRA's.

For details please call Rob or Jim.