Retirees saw trillions of dollars disappear from their retirement accounts in the closing months of 2008, thanks to the crisis in the financial markets. Some relief for those 70½ and older was included in a year-end law passed by Congress on December 11, 2008.  The Worker, Retiree, and Employer Recovery Act of 2008 included a provision that will let these older taxpayers forgo the required annual minimum distribution from their retirement accounts for the year 2009.

Normally, those 70½ or older must take annual distributions from their retirement accounts or pay a 50% tax on the amount required to be withdrawn but not taken. 

Without the relief provided in this new legislation, retirees would have to take a 2009 distribution from an already depleted account, leaving even less in the account to recover once the economic situation improves.

The law did not change minimum distribution requirements for 2008.  For more information on the new law, contact our office.