Just before Christmas of 2008, the president signed the Worker, Retiree, and Employer Recovery Act of 2008. The bill suspended 2009 Required Minimum Distributions (RMDs) for IRAs, 401(k)s and 403(b)s.
The intent of this change was primarily to give a break to retirees whose account balances probably cratered last year. Normally, when a person turns 70½, he or she is required to begin withdrawing money from most kinds of retirement plans so that the IRS can collect its share of income tax. In addition to being taxed as income, the funds removed lose the benefit of tax-free accumulation in the …Read More