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I am posting this as it may be worthy of consideration by our more senior members. This response was in reply to a letter I wrote. During the financial meltdown in 2008-2009 the IRA RMD requirement was suspended for one year due to the severely reduced balance in the IRA. My accountant suggested that I wait until the end of the year to take an RMD as it may possibly be deferred. May be worth considering.
April 9, 2020
Dear Mr. Pilkington:
Thank you for contacting me about the required minimum distributions (RMDs). I appreciate hearing from you.
Some retirement account holders are required to withdraw a minimum percentage from their retirement account, known as RMDs. Under federal law, RMDs are based on the previous end of year balance and must begin being taken by the first of April of the year that the account holder reaches the age of 70 and a half prior to January 1, 2020, or 72 for those thereafter. RMDs are not required for Roth IRA accounts.
For 2020, the RMD calculation is based on an account balance of December 31, 2019. However, since January 1, the S&P 500 stock market index has fallen nearly 25.5 percent, as the world has been rattled by the spread of the coronavirus (COVID-19) outbreak. This means that seniors will be forced to deplete a far larger percentage of their retirement accounts than anticipated, or face penalties.
Protecting the financial viability of our seniors and retirees is critically important. That is why I introduced S. 3527, a bill, which would suspend the RMD requirement and waive the 50 percent tax penalty for 2020. S. 3527 has been referred to the Senate Finance Committee, of which I am not a member.
I appreciate knowing your concerns and will keep them in mind as I continue to fight for fair and responsible tax policies that fairly address the needs of all Americans seniors.
Thank you again for contacting me. Please feel free to keep in touch.
Sincerely,
Richard J. Durbin
United States Senator
I am posting this as it may be worthy of consideration by our more senior members. This response was in reply to a letter I wrote. During the financial meltdown in 2008-2009 the IRA RMD requirement was suspended for one year due to the severely reduced balance in the IRA. My accountant suggested that I wait until the end of the year to take an RMD as it may possibly be deferred. May be worth considering.
April 9, 2020
Dear Mr. Pilkington:
Thank you for contacting me about the required minimum distributions (RMDs). I appreciate hearing from you.
Some retirement account holders are required to withdraw a minimum percentage from their retirement account, known as RMDs. Under federal law, RMDs are based on the previous end of year balance and must begin being taken by the first of April of the year that the account holder reaches the age of 70 and a half prior to January 1, 2020, or 72 for those thereafter. RMDs are not required for Roth IRA accounts.
For 2020, the RMD calculation is based on an account balance of December 31, 2019. However, since January 1, the S&P 500 stock market index has fallen nearly 25.5 percent, as the world has been rattled by the spread of the coronavirus (COVID-19) outbreak. This means that seniors will be forced to deplete a far larger percentage of their retirement accounts than anticipated, or face penalties.
Protecting the financial viability of our seniors and retirees is critically important. That is why I introduced S. 3527, a bill, which would suspend the RMD requirement and waive the 50 percent tax penalty for 2020. S. 3527 has been referred to the Senate Finance Committee, of which I am not a member.
I appreciate knowing your concerns and will keep them in mind as I continue to fight for fair and responsible tax policies that fairly address the needs of all Americans seniors.
Thank you again for contacting me. Please feel free to keep in touch.
Sincerely,
Richard J. Durbin
United States Senator
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