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.
11 Comments
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.
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Any moves that mean people don’t have to realize losses in the current financial crisis has to be a good thing.
And alot of people get rich by investnow nowadays while we have a credit crunch!
Very Nice Post. Thanks to sharing with us.
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.
I am a 70 year old man and your post really helped me a lot on realizing my situation.
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.
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The market is pretty hopeless for me too.. thanks for sharing this info!
so that’s what financial crisis has brought to everyone.
Great advice for those that were required to take payouts from retirement accounts. This is very up to date information.
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Appreciate your comments.
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