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New IRA Law Bewilders Investors
Old 02-14-2009, 11:53 AM   #1
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New IRA Law Bewilders Investors

Has anyone here experienced this problem with their IRA/401(k) custonian? Seems confusing.

A number of IRA custodians are trying to establish procedures, especially for investors who receive automated payments each year from their retirement accounts, that will allow account holders to suspend or trim required minimum withdrawals. But some don't plan to send letters outlining changes for 401(k) holders until April. In the meantime, some custodians are still mailing checks -- even to retirees who may not want them. Other custodians are stopping payments unless account owners ask for the funds.

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Old 02-14-2009, 02:06 PM   #2
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It's a bit of a conundrum. On one hand, if you pay out monthly RMD checks, people who might not want to take it will take it and get taxed on it. If you decide not to, some people who *need* those RMD checks for income could be on thin ice. I guess it requires additional communications, policy and cost for these custodians, but it would be nice to get it out sooner rather than later in case some people subject to RMDs don't understand they don't have to take one in 2009 if they don't want to.

In any event, I set the RMD on my mom's Vanguard account to be sent once a year in December. That way if anything happens during the year that eliminates the RMD requirement, I probably have time to suspend it. Anyway, I suspended her RMD for 2009 on Vanguard's web site and I have a note to re-enable it in 2010.

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Old 02-14-2009, 02:17 PM   #3
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PENFED already sent a letter about your right to waive or continue to get RMD for 2009. Letter said basically tell us what you want to do via a on-line message. DW gets hers once a year in DECEMBER of the respective year.

For those that got them and did not want them for 2009 - can't they just send them back within 60 days, along with a note what to do with the remainder of the 2009 RMD payments (i.e, waive them)?
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