Recognizing the bear market’s severe impact, lawmakers approved an economic relief measure before they adjourned earlier this month that can be a big deal for most older retirement investors.
The legislation suspends for 2009 the rules that force older individual retirement account holders and their beneficiaries to take minimum annual withdrawals, or what’s referred to as RMDs (Required Minimum Distributions).
The legislation, called the Worker, Retiree, and Employer Recovery Act of 2008, applies to RMDs for IRAs, 401(k)s, 403(b)s, and similar plans. It only applies to withdrawals in 2009, so 2008 needs to be taken, and they will be back in force (barring any changes) for 2010.