What does this mean for individuals subject to RMDs?
- Individuals do not have to receive their RMD for the 2009 tax year.
- The suspension of RMDs applies to IRAs and other qualified plans, such as 401(k) and 403(b) plans.
- There is no exemption for the 2008 tax year. You will need to receive a RMD by April 1, 2009, if you attained age 70½ in 2008.
- Any distributions received in 2009 are subject to normal income taxes.
- If an individual receives a distribution in 2009, they may roll over this amount to an IRA within 60 days of receiving the distribution. Please note that any amounts received in 2009 that satisfy a RMD for the 2008 tax year cannot be rolled over.
- Normal RMD procedures will resume in 2010.
What do I have to do?
- Since this relief applies to only the 2009 tax year, Modern Woodmen will still send out distributions just like we have in the past unless an individual chooses otherwise.
- Individuals subject to a RMD should contact their Modern Woodmen representative or the Modern Woodmen home office if they do not want to receive a RMD for the 2009 tax year.
Note for beneficiaries:
- If a beneficiary is using the "five-year rule" for complying with the RMD rules and tax year 2009 falls within the five-year period, the five-year period is automatically extended by one year.
- Beneficiaries receiving payments based on life expectancy may skip their RMD for the 2009 tax year.
This may be a good time to review all of your IRAs and other retirement plans with your Modern Woodmen representative. How are your retirement assets positioned? Have you reviewed your beneficiaries lately? Do any changes need to be made? Your Modern Woodmen representative can assist you with this review process as well as other questions you may have regarding your financial situation.
You should contact your tax adviser for any questions related to your specific income tax situation.