Take a break from Required Minimum Distributions for 2009
One of the last acts signed into law by former President Bush on December 23, 2008 includes a 1-year waiver of Required Minimum Distributions from IRAs and most defined contributions plans offered by an employer. The special waiver is in effect only for distributions that would have been required for tax year 2009.
It is important to remember that the waiver does not apply to required minimum distributions for tax year 2008. If you did not take your required distribution for 2008, you are subject to a 50% IRS excess accumulation penalty, but may apply for a waiver of the penalty if you can show reasonable cause.
However, thanks to the new law, you will likely be able to choose to not take the required minimum distribution for the 2009 tax year. This 1-year waiver allows you to:
- Eliminate the tax impact of taking a 2009 Required Minimum Distribution.
- Keep your retirement plan assets intact for an extended period of time.
What you should do today
Now is a good time to plan the most appropriate actions for 2009 as it relates to your IRAs and workplace savings plans. Talk to your Ameriprise financial advisor to consider all of your options and most tax-efficient strategy based on your income needs and cash flow.
Financial planning services and investments offered through Ameriprise Financial Services, Inc., Member FINRA and SIPC.