Don’t Take Your Losses!

Tax Act

Many people have been troubled by the impact of the financial crisis on their savings. If you are retired, you probably know that there is an annual minimum distribution that you are required to take from your IRA if you are 70-1/2 or older, that is, you must take money out every year, or you are penalized on the funds. However, if you do not need the money to live on, you may consider it a disadvantage to have to cash something out at the moment, because you might want to leave your investments in place to recover, rather than sell them and make the paper loss into a real loss.

Although this requirement still applies to 2008 taxes, the rule has been suspended for 2009, which means that you are not penalized if you choose to leave your investments in place this year, and not take any money out. In that way, you can continue to get the tax advantages on the returns rather than being forced to sell when the markets are down.

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9 Comments

  1. Posted March 10, 2009 at 11:54 pm | Permalink

    Great advice for those that were required to take payouts from retirement accounts. Of course if you have loses in a taxable account, then take loses up to certain levels can be deducted and help your tax situation.

    South Beach Acai’s last blog post..The Health Benefits of Acai Berry

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  2. Posted March 17, 2009 at 12:19 pm | Permalink

    Very Nice Post. Thanks to sharing with us.

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  3. Posted March 30, 2009 at 2:23 am | Permalink

    It looks like the markets are starting to recover and we could end up with a pretty decent year. Not taking those loses looks like a very good ideal.

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  4. Posted March 30, 2009 at 3:59 pm | Permalink

    I am a 70 year old man and your post really helped me a lot on realizing my situation.

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  5. Posted March 31, 2009 at 3:35 am | Permalink

    This market is tricky. It quickly moves higher and just when you think it is safe to get back in, it drops. Like today’s fall.

    acai supplements’s last blog post..Acai Berry Free Trials – April 2009

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  6. family tents
    Posted April 2, 2009 at 3:09 pm | Permalink

    The market is pretty hopeless for me too.. thanks for sharing this info!

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  7. solteiros latino
    Posted May 1, 2009 at 1:45 am | Permalink

    so that’s what financial crisis has brought to everyone.

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  8. Steve
    Posted December 15, 2009 at 4:15 pm | Permalink

    Appreciate your comments.

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  9. Mannatech LIFT
    Posted February 20, 2011 at 9:37 pm | Permalink

    Thanks for the tips about not taking losses.

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