Congress recently passed legislation waiving required minimum distributions (RMD) from an IRA, 401k plan, and other qualified retirement plan for 2009. Based on that, some retirees age 70 1/2 and older who are subject to RMD rules waited to see if the Treasury would apply the RMD waiver for 2008 as well.
On December 18, the Treasury announced that the Required Minimum Distribution rules would apply for 2008.
Although this does not apply to me, I am sure that some seniors are now scrambling to make the necessary withdrawals before December 31, 2008. If they do not, the IRS will impose a nasty penalty: 50% of the amount that should have been withdrawn in 2008. Ouch.
If any baby boomers out there have older relatives that may be under the impression that the Required Minimum Distribution rules do not apply in 2008, make sure that those relatives now know that they were incorrect.
Photo credit: Steve Woods