People older than 70½ are excited that they don't have to take a required minimum distribution from their IRAs and other retirement accounts in 2009. But they have a lot of follow-up questions. Here are some answers.
I will be 70½ on March 28, 2009, and I do not have to take my first required minimum distribution from my IRA until April 1, 2010. Will I benefit from the law that suspends required minimum distributions for 2009?
You're in luck. Even though people who turn 70½ in 2009 would normally have until April 1, 2010, to take their first required distributions, it still counts as their 2009 withdrawal. So you get to benefit from the break, too.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
However, you will need to take your 2010 distribution by December 31, 2010 -- just like everyone else.
I turned 70½ in November 2008 and don't need to take my first required minimum distribution until April 1, 2009. Is that distribution suspended, too?
No. Although you have until April 1, 2009, to take your first distribution, it still counts as your 2008 distribution. You will have to withdraw that money by the April 1 deadline. See Treasury to Seniors: Drop Dead for more information. But you won't have to take your 2009 withdrawal this year, thanks to the suspension.
I still work, but I'm older than 70½. Do I need to start taking withdrawals from my 401(k)?
No, employees who continue to work beyond age 70½ are exempt from the rules that apply to taking a required minimum distribution from a 401(k). The exemption does not apply if you are self-employed or own 5% or more of the company.
-
AI Stocks Lead Nasdaq's 398-Point Nosedive: Stock Market TodayThe major stock market indexes do not yet reflect the bullish tendencies of sector rotation and broadening participation.
-
Top Tech Gifts to Grab at Walmart Before ChristmasBig savings on Apple, Bose, HP, Vizio and more while there's still time to shop.
-
AI Appliances Aren’t Exciting Buyers…YetThe Kiplinger Letter Artificial intelligence is being embedded into all sorts of appliances. Now sellers need to get customers to care about AI-powered laundry.
-
Getting Out of an RMD Penaltyretirement When your brokerage firm miscalculates your required minimum distributions, you have recourse.
-
Borrowers Get More Time to Repay 401(k) Loans
retirement If you leave your job while you have an outstanding 401(k) loan, Uncle Sam now gives you extra time to repay it -- thanks to the new tax law.
-
It’s Not Too Late to Boost Retirement Savings for 2018
retirement Some retirement accounts will accept contributions for 2018 up until the April tax deadline.
-
How to Correct a Mistake on Your RMDs from IRAsretirement If you didn't take out the correct required minimum distribution because your brokerage firm made a mistake, the IRS may show some leniency.
-
Making the Most of a Health Savings Account Once You Turn Age 65
Making Your Money Last You’ll face a stiff penalty and taxes if you tap your health savings account for non-medical expenses before the age of 65. After that, the rules change.
-
Reporting Charitable IRA Distributions on Tax Returns Can Be Confusing
IRAs Taxpayers need to be careful when reporting charitable gifts from their IRA on their tax returns, or they may end up overpaying Uncle Sam.
-
Make the Most of the New Military Retirement Plan
retirement The government is offering a new retirement option so that service members who leave the military before qualifying for a pension can still receive some benefits.
-
How Changes in Income Affect Medicare Premiums
Medicare Medicare beneficiaries can see their premiums go up if their income rises, although for some that increase will be only temporary.
