Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Rollover RMD ?
Old 11-18-2009, 05:32 AM   #1
Full time employment: Posting here.
Delawaredave5's Avatar
 
Join Date: Dec 2004
Posts: 606
Rollover RMD ?

Mom is 72 and required to take RMD from her IRA. She received below email the other day from Vanguard.

What does it mean ?

I'm assuming she still must take RMD - but if she already withdrew enough earlier in the year, you can rollover an automatic RMD distribution back into an IRA account ?

"By now, you may have heard about legislation passed in 2008 that lets you choose to take your 2009 required minimum distribution (RMD), take a partial distribution, or suspend your 2009 RMD entirely. These options apply to traditional, SEP-, SIMPLE, and rollover IRAs, as well as 401(k)s, 403(b)s, defined contribution plans, and inherited IRAs and inherited retirement plan accounts that are subject to RMDs."
__________________

__________________
Delawaredave5 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-18-2009, 08:48 AM   #2
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
This is actually a VERY timely topic.

If she has not yet taken the RMD, she doesn't have to take it in 2009.

Normally when someone takes a withdrawal, they have 60 days to reverse it and return it to the IRA -- and normally if the withdrawal was more than 60 days ago, it's too late to reverse the distribution. But for 2009 only, that deadline to reverse a distribution has been extended to either 60 days or November 30, 2009 -- whichever is later. So for 2009 only, even if someone took an RMD for 2009 earlier in the year and only now is realizing they didn't have to take it -- they had better hurry and reverse the distribution before the end of this month.

See IRS Notice 2009-82 for more details. Anyone who has taken an RMD for 2009 and later realized they didn't have to take it has until November 30 to reverse the distribution and avoid the tax hit, provided they haven't already reversed a distribution in 2009.

http://www.irs.gov/pub/irs-drop/n-09-82.pdf
__________________

__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 11-18-2009, 09:19 AM   #3
Full time employment: Posting here.
Delawaredave5's Avatar
 
Join Date: Dec 2004
Posts: 606
Thanks. So the requirements of taking an RMD have not changed - nor has the amount - right ?

Above applies only if a person distributed out more than they required - in this case, they can "put some back".

The calculators say my mom needs to take out at least $5,000 - she hasn't taken out any this year - so I still need to do her RMD.
__________________
Delawaredave5 is offline   Reply With Quote
Old 11-18-2009, 09:21 AM   #4
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by Delawaredave5 View Post
The calculators say my mom needs to take out at least $5,000 - she hasn't taken out any this year - so I still need to do her RMD.
She does not need to take an RMD for 2009 at all. IF she had done so already, she would have had 60 days or until November 30 to roll it back into the IRA to avoid taxes.

But if she hasn't taken it yet and she doesn't need the money and wants to put off the taxes, just don't take one this year.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 11-18-2009, 09:51 AM   #5
Full time employment: Posting here.
Delawaredave5's Avatar
 
Join Date: Dec 2004
Posts: 606
Thanks ! I missed this - just found below elsewhere on web.

-----------------------
From Vanguard:

December 23, 2008

Breaking news on RMDs

If you're over age 70, you won't have to take required minimum distributions (RMDs) in 2009 from your tax-deferred retirement accounts under new legislation signed by President Bush.

The law is intended to help seniors conserve their retirement resources in the wake of the recent stock market downturn.

Normally, investors over age 70 are required to take an annual withdrawal from their retirement accounts (based on their life expectancy and prior year's account balance) or pay a 50% penalty on the amount they should have withdrawn.

Supporters of the legislation said it's unfair to require retirees to withdraw funds from retirement accounts depleted by the stock market selloff. Suspending 2009 RMDs will presumably leave more money in investors' retirement accounts, where it will have the potential to continue growing tax-free until withdrawal.

The 2009 RMD suspension applies to traditional IRAs, 401(k)s, 403(b)s, and other defined contribution plans. The suspension also applies to investors under age 70 with inherited IRAs or inherited retirement plan accounts that would otherwise be subject to RMDs.
What about 2008 RMDs?

The new law doesn't suspend RMDs taken for 2008.

If you were over age 70 for all of 2008 and you haven't requested your 2008 RMD on savings held at Vanguard, you have until Wednesday, December 31, though we suggest doing so sooner, if possible. If you turned 70 during 2008, you have until April 1, 2009 to request your distribution for 2008.

You can get an estimate of your 2008 RMD on Vanguard.com. You can request your distribution from Vanguard online, by phone, or by mail. If you're planning to request a distribution by mail, we strongly recommend doing so at least a week ahead of time in order to meet the deadline.
__________________
Delawaredave5 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
RMD question Samtex FIRE and Money 4 08-30-2009 11:20 PM
RMD question bigla FIRE and Money 6 12-04-2008 07:30 AM
Annuities and RMD cashflo2u2 FIRE and Money 2 01-11-2008 12:35 PM
RMD and Annuities hogwild FIRE and Money 6 07-25-2007 01:48 PM
RMD Tip charlie FIRE and Money 8 03-03-2006 02:12 PM

 

 
All times are GMT -6. The time now is 12:46 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.