Tom and I talk about how much money people are losing in their 401Ks all the time (including us). Good news! Congress is doing something for us about it. See the article below.
By Sandra Block, USA TODAY
Congress approved legislation that would provide relief to retirees who want to avoid inflicting further damage on their battered retirement savings plans.
The bill, which President Bush is expected to sign, allows retirees to defer withdrawals from their 401(k) plans and individual retirement accounts in 2009 without triggering a penalty. Separately, it would temporarily ease funding rules for traditional pension plans.
Ordinarily, seniors age 70½ and older are required to withdraw a minimum amount from their tax-deferred retirement savings plans every year and pay taxes on the money. The amount is based on a life expectancy factor calculated by the IRS and the value of their retirement plans at the end of the previous year. Seniors who ignore the requirement face a penalty equal to 50% of the amount they should have withdrawn.
This year, the rule has created considerable angst among retirees who have seen the value of their retirement plans shrink dramatically since Dec. 31, 2007. Unlike younger retirees, they don't have the option of postponing their withdrawals until their investments recover. Many have postponed taking minimum withdrawals in hopes that Congress or the Treasury Department will provide some relief.
FULL ARTICLE: http://www.usatoday.com/money/perfi/retirement/2008-12-11-ira-savings-retirement_N.htm?csp=Daily%20Briefing
No comments:
Post a Comment