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FOR IMMEDIATE RELEASE
Jack Taylor ChFC Hails RMD Suspension for 2009Heathrow, FL January, 2009: -- As reported the Associated Press on December 23, 2008, President George W. Bush signed the Worker, Retiree and Employer Recovery Act. As part of this act the Required Minimum Distribution (RMD) for 2009 is suspended. Jack Taylor, a long time advocate for retirees, is elated: “ Finally, a break in the Government’s onerous practice of forcing people to take money from their Traditional IRA’s just to pay tax.” Traditional IRAs force account holders, in the year they turn 70 ½, to take a calculated Required Minimum Distribution from their account whether they need the money or not. 2008’s market losses spurred the government to take action. There is no relief for capital losses in an IRA. Distributions from Traditional IRAs are counted as ordinary income and go on your tax return as such and can even effect the taxation of your Social Security benefits. . “The structure of the IRA is flawed.” Taylor says. “Many people don’t know about RMDs and tax on distributions. Some times people find out about it when they rollover their 401(k). Many times not even then.” Taylor suggests that government should combine the benefits of the Traditional IRA / 401(k) with its counterpart the Roth IRA/401(k). This would give the retirement saver a tax deduction for contributions; tax deferred growth and tax-free distributions. “Retirees have a lot to worry about. I am happy that, at least for this year, the government isn’t going to force people to liquidate losing positions and then pay tax on the proceeds.”
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