Market down turn
L1: Market down turnThe IRS has suspended RMD due to market declines for 2009.
I have been taking my 72t elections since age 48.
Current age is 51
The account value is down with the market. If we have an extrordinary drop in the account value do to market declines do we have the ability to reduce our 72 t distribution?
2009-08-28 00:20, By: ET, IP: [184.108.40.206]
L2: Market down turnShort answer… No2009-08-28 00:28, By: Gfw, IP: [220.127.116.11]
L3: Market down turnIf you are not already on the RMD method, you can make the one time switch to RMD. But if your IRA balance is down, then using that balance to calculate the switch is going tocause a dramatic reduction in your 72t distribution, not to mention added unpredictability in future years. The danger is that the new distributions are TOO SMALL to provide the income you need and as a result your entire plan is jeopardized.
If you are already using RMD, there is no further adjustment you can make. Small comfort, but if the IRA goes to -0-, you are not deemed to have busted your plan. Just hope at that point you have other assets.2009-08-28 02:55, By: Alan S., IP: [18.104.22.168]
L4: Market down turnPoint of clarification. The “RMD Suspension for 2009” only applies to people who have passed their “Required Beginning Date (RBD) … basically those age 70.5 and older, and people with “Beneficiary IRA” who are also required to make RMD distributions regardless of age.
72(t)participants don’t get to skip distributions for2009, even if they are using the “RMD method.” The two RMD’s are not the same for purposes of skipping distributions for 2009.
Hope this helps.
Jim2009-08-28 14:25, By: Jim, IP: [22.214.171.124]