Congress Revises Retirement-Fund Rules [Bush final tax cut]

Wall Street Journal ^ | 1/4/2008 | ANNE TERGESEN

[bruinbirdman]

A new tax law will allow retirees to skip required withdrawals from individual retirement accounts and related accounts this year [2009]. The change -- signed into law by President Bush last month -- is intended to give beaten-down nest eggs time to rebound from the brutal bear market.

~snip~

The new law suspends required distributions in 2009. This gives those who can afford to leave their nest eggs alone a better chance of recovering some of the investment losses they sustained last year.

"They'll have more dollars working for them in the event of a stock-market rebound," says Elizabeth Drigotas, a principal at Deloitte Tax.

If you don't need to pull money out of retirement accounts for living expenses, the new law will also delay the tax you would have owed on your 2009 distribution.

Unless Congress decides to extend the moratorium, those over age 70½ -- along with those who have inherited IRAs or 401(k)s -- will be forced to resume taking withdrawals in 2010. (Note: Neither Congress nor the Treasury Department took any action involving withdrawals, or taxes on withdrawals, for 2008.). . .

[bruinbirdman]

Another Bush tax cut.

[FlyVet]

Bravo. I wish he was half as good about spending as he is about tax cutting.

[Cementjungle]

Hmmm.... Congress wants more left in those accounts for when they grab them.