No Minimum Distribution Rules for Retirement Accounts in 2009

2008 was not a good year for the retirement accounts of most workers.  Congress recently passed the Worker, Retiree, and Employer Recovery Act of 2008.  This new law temporarily suspends the required minimum distribution requirements for 2009!

You usually have to start taking a minimum annual distribution for your IRA after you reach age 70.  You also usually have to start taking minimum distributions from your qualified retirement plan after you reach age 70, unless you continue to work.  The law also waives 2009 minimum annual distribution rules for inherited IRAs and employer retirement accounts. 

If you turned 70 before January 1, 2009, you would generally have to receive a distribution by December 31, 2009.  If you turned 70 in 2009, you would usually have to take a distribution by April 1, 2010.  The new law suspends the distribution requirement for 2009 only.  The old rules return for distribution in 2010.

While you do not have to take a distribution in 2009, you may want to if you are in a low income bracket and your children, who will inherit your IRA, are in higher income bracket.  You should consult your financial accountant or advisor with any questions.

Keith P. Huffman
Dale & Huffman
January 2009