New Legislation Just Enacted By President Bush!
President Bush signed a new law on December 23, 2008 that waives the required minimum distribution (RMD) for qualified retirement plans and individual retirement accounts (IRA’S). The law requires certain employees and individuals to receive a minimum distribution by April 1st. following the year they attain the age of 70 1/2 and each December 31st. thereafter.
However, under the new law; Worker, Retiree, and Employer Recovery Act of 2008 (H.R. 7327), the Act says:
- No minimum distribution is required for calendar year 2009 from IRA’s and defined contribution plans (i.e. 401(k), profit sharing, money purchase, 403(b), and governmental 457(b) plans).
- Beneficiaries will not be required to take distributions from inherited IRA’s for 2009.
- Individuals who attain age 70 1/2 during 2009 will not be required to take their first distribution. However, they will be required to take what would normally be considered their second distribution by December 31, 2010.
- Distributions from IRA and defined contribution plans during 2009 that would not previously have been eligible for rollover because they were considered to RMD may now be rolled over.
Individuals attaining age 70 1/2 in 2008 that chose to defer their 2008 RMD until 2009 must still take their 2008 distribution by April 1, 2009. This act does not provide relief from required minimum distributions for defined benefit plans.
"Greg Gilbert and James Simos" are registered representatives of FINRA member firm, "Infinity Financial Services."
