Thursday, January 29, 2009

Pension Distribution

You Do Not Have To take that Pension Distribution

If you have money in a pension or IRA and are age 70-1/2 or over you are required to take distributions every year so that you will withdraw all of your tax deferred money over your expected life. This is called a Required Minimum Distribution (RMD). Congress enacted a special rule for 2009 only that allows you to skip the RMD for 2009. This means that you do not have to take a distribution. This is a one-year provision only.

There is also a special rule for the year you turn 70-1/2. You may take the RMD up to April 1st of the following year. Thus, if you turned 70-1/2 in 2008 you must take the RMD for 2008 by April 1, 2009. The law mentioned above does not apply to the RMD for 2008. You still must take your 2008 distribution by April 1, 2009 but you may skip the 2009 distribution that should be taken by December 31, 2009

Confused? Comment on this blog with a question or try this IRS link to get more information,,id=96989,00.html

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