RMD Alert: Temporary Relief for 2009

<span style="font-family:Arial;font-size:12px;"><span style="font-weight:bold;"><br></span><h3>Required Minimum Distributions (RMD) Background and Summary</h3><p>On December 23, 2008, President Bush sgned into law the Worker, Retiree, and Employer Recovery Act. The Act states that no RMD is required for 2009. As you are aware, the current global economic conditions have caused sharp declines in many contract values. This Act is designed to provide relief to contract owners who would otherwise be forced to take a distribution in 2009. The goal is to not force contract owners to take a distribution when their contract value is at a low point and instead allow those funds to stay invested in the contract and participate in any <a rel="nofollow" href="http://www.erollover.com/blog/ira-distributions/2009-401k-ira-required-minimum-distributions-changes#" id="KonaLink0" style="color:#009600;text-decoration:underline;cursor:pointer;font-family:verdana;border-top-width:0px !important;border-right-width:0px !important;border-bottom-width:0px !important;border-left-width:0px !important;border-top-style:none;border-right-style:none;border-bottom-style:none;border-left-style:none;border-top-color:transparent;border-right-color:transparent;border-bottom-color:transparent;border-left-color:transparent;background-image:none;background-color:transparent;text-transform:none;font-variant:normal;"><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">economic </span><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">recovery</span></a> .</p><p><span style=""><strong>Please visit our site for more Retirement, 401k, and Insurance information:</strong><br><a rel="nofollow" href="http://www.erollover.com/" style="color:#cc0000;text-decoration:none;">www.erollover.com</a></span></p><h3>The RMD Rules, Briefly Stated:</h3><p>Individuals are required to take at least a minimum annual distribution from their account after they reach their required beginning date, which is the April 1 after they reach age 70 1/2.<br>For beneficiaries of deceased individuals not already receiving RMDs, the required beginning date is either following the 5th anniversary of death (for a complete distribution) or following the 1st anniversary of death (for a periodic distribution). Special rules apply if the only designated beneficiary is the surviving spouse.</p><h3>The Situation That Congress Sought to Relieve:</h3><p>In the current economic environment, many contract values have been diminished by the deep declines in the <a rel="nofollow" href="http://www.erollover.com/blog/ira-distributions/2009-401k-ira-required-minimum-distributions-changes#" id="KonaLink1" style="color:#009600;text-decoration:underline;cursor:pointer;font-family:verdana;border-top-width:0px !important;border-right-width:0px !important;border-bottom-width:0px !important;border-left-width:0px !important;border-top-style:none;border-right-style:none;border-bottom-style:none;border-left-style:none;border-top-color:transparent;border-right-color:transparent;border-bottom-color:transparent;border-left-color:transparent;background-image:none;background-color:transparent;text-transform:none;font-variant:normal;"><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">stock </span><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">market</span></a> .</p><p>Congress was concerned that requiring individuals to take 2009 RMDs could have the unintended effect of forcing individuals to “sell low.” As a result, the RMD would diminish the likelihood of the individual being able to participate in any economic recovery.</p><h3>What This Act Changes:</h3><p>No RMD is required for 2009.<br>Any individual who attains age 70 ½ in 2009 will not be required to take a first RMD by April 1, 2010, but the distribution for the 2010 calendar year must be taken by December 31, 2010.</p><p>If the individual takes a partial withdrawal, the distribution is not subject to the mandatory 20% withholding that is typically required of RMDs.</p><p>For beneficiaries under the 5-year rule, the 5-year deferral period is extended by one year (e.g., if an individual died in 2007, the period would end in 2013 instead of 2012).</p><p><span style=""><strong>Please visit our site for more Retirement, 401k, and Insurance information:</strong><br><a rel="nofollow" href="http://www.erollover.com/" style="color:#cc0000;text-decoration:none;">www.erollover.com</a></span></p><h3>Frequently Asked Questions</h3><p>Q1. If I don’t take a 2009 RMD, won’t I be required to pay a <a rel="nofollow" href="http://www.erollover.com/blog/ira-distributions/2009-401k-ira-required-minimum-distributions-changes#" id="KonaLink4" style="color:#009600;text-decoration:underline;cursor:pointer;font-family:verdana;border-top-width:0px !important;border-right-width:0px !important;border-bottom-width:0px !important;border-left-width:0px !important;border-top-style:none;border-right-style:none;border-bottom-style:none;border-left-style:none;border-top-color:transparent;border-right-color:transparent;border-bottom-color:transparent;border-left-color:transparent;background-image:none;background-color:transparent;text-transform:none;font-variant:normal;"><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">tax</span></a>  penalty? No. Under the Act, there is no RMD required for 2009, and no <a rel="nofollow" href="http://www.erollover.com/blog/ira-distributions/2009-401k-ira-required-minimum-distributions-changes#" id="KonaLink2" style="color:#009600;text-decoration:underline;cursor:pointer;font-family:verdana;border-top-width:0px !important;border-right-width:0px !important;border-bottom-width:0px !important;border-left-width:0px !important;border-top-style:none;border-right-style:none;border-bottom-style:none;border-left-style:none;border-top-color:transparent;border-right-color:transparent;border-bottom-color:transparent;border-left-color:transparent;background-image:none;background-color:transparent;text-transform:none;font-variant:normal;"><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">tax </span><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">penalty</span></a>  will be assessed if you do not take your RMD. In a normal year, the Tax Code assesses a 50% excise tax on any required distribution that fails to be distributed. But 2009 will not be a normal year. No excise taxes will apply because there will be no required distributions in 2009.</p><p>Q2. I’ve been taking RMDs for years and I’ve grown to depend on them as a source of <a rel="nofollow" href="http://www.erollover.com/blog/ira-distributions/2009-401k-ira-required-minimum-distributions-changes#" id="KonaLink6" style="color:#009600;text-decoration:underline;cursor:pointer;font-family:verdana;border-top-width:0px !important;border-right-width:0px !important;border-bottom-width:0px !important;border-left-width:0px !important;border-top-style:none;border-right-style:none;border-bottom-style:none;border-left-style:none;border-top-color:transparent;border-right-color:transparent;border-bottom-color:transparent;border-left-color:transparent;background-image:none;background-color:transparent;text-transform:none;font-variant:normal;"><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">retirement </span><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">income</span><span id="preLoadWrap6"></span></a>. Can I still take the distribution that I had planned on? Absolutely. Your access to your contract hasn’t changed. The only thing that’s changed is that you aren’t required to take a 2009 minimum distribution. If you would like to take a distribution anyway, you can certainly do that.</p><p>Q3. I currently have a systematic withdrawal set up on my contract. Will I still receive my<br>payments? A systematic withdrawal is an automatic withdrawal that you take monthly, quarterly or annually. If there is currently a systematic RMD withdrawal set up on your contract, and you wish to keep it, there is nothing you need to do. The payment you receive will be based on the RMD calculation. However, you may elect to receive a systematic withdrawal in any amount that you request.</p><p>Q3a. If I stop my payments, what will happen in 2010? Starting in 2010, your systematic payments will resume in accordance with your original instructions.</p><p>Q3b. How do I stop my payments? If you wish to stop receiving the payments, please contact us.</p><p>Q3c. Can I return a systematic payment that I received? You can roll over any payments received back into the contract. The transaction will be processed on the day that all paperwork is received in good order prior to the close of the New York <a rel="nofollow" href="http://www.erollover.com/blog/ira-distributions/2009-401k-ira-required-minimum-distributions-changes#" id="KonaLink7" style="color:#009600;text-decoration:underline;cursor:pointer;font-family:verdana;border-top-width:0px !important;border-right-width:0px !important;border-bottom-width:0px !important;border-left-width:0px !important;border-top-style:none;border-right-style:none;border-bottom-style:none;border-left-style:none;border-top-color:transparent;border-right-color:transparent;border-bottom-color:transparent;border-left-color:transparent;background-image:none;background-color:transparent;text-transform:none;font-variant:normal;"><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">Stock </span><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">Exchange</span></a> .</p><p>Q4. What period does the relief apply to? The relief applies to RMDs due to be paid out to satisfy the 2009 RMD requirement. Any individual who attained age 70 ½ in 2008 and opted to defer his or her 2008 payment up to April 1, 2009, would still need to take a 2008 payment between now and April 1, 2009.</p><p>Q5. Which plans does this relief apply to? The waiver applies to the following plans: <a rel="nofollow" href="http://www.erollover.com/blog/ira-distributions/2009-401k-ira-required-minimum-distributions-changes#" id="KonaLink8" style="color:#009600;text-decoration:underline;cursor:pointer;font-family:verdana;border-top-width:0px !important;border-right-width:0px !important;border-bottom-width:0px !important;border-left-width:0px !important;border-top-style:none;border-right-style:none;border-bottom-style:none;border-left-style:none;border-top-color:transparent;border-right-color:transparent;border-bottom-color:transparent;border-left-color:transparent;background-image:none;background-color:transparent;text-transform:none;font-variant:normal;"><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">IRA</span></a> , 401(a), 401(k), 403(a), 403(b) and governmental 457(b) plans.</p><p>Q6. What is the relief being provided with regard to RMD payments for the 2009 calendar year?<br>Relief is being provided in the following ways:</p><p>a) No RMD is required for 2009.</p><p>b) Any individual who attains age 70 ½ in 2009 will not be required to take a first RMD by April 1, 2010, but the distribution for the 2010 calendar year must be taken by December 31, 2010.</p><p>c) If the individual takes a partial withdrawal, the distribution is not subject to the mandatory 20% withholding that is typically required of RMDs.</p><p>d) For beneficiaries under the 5-year rule, the 5-year deferral period is extended by one year (e.g., if an individual died in 2007, the period would end in 2013 instead of 2012).</p><p>Q7. What about the RMD I just took for 2008? Am I going to receive any relief for that?<br>This relief applies only to 2009.</p><p>This information is provided as general guidance. It is not intended to be legal or <a rel="nofollow" href="http://www.erollover.com/blog/ira-distributions/2009-401k-ira-required-minimum-distributions-changes#" id="KonaLink9" style="color:#009600;text-decoration:underline;cursor:pointer;font-family:verdana;border-top-width:0px !important;border-right-width:0px !important;border-bottom-width:0px !important;border-left-width:0px !important;border-top-style:none;border-right-style:none;border-bottom-style:none;border-left-style:none;border-top-color:transparent;border-right-color:transparent;border-bottom-color:transparent;border-left-color:transparent;background-image:none;background-color:transparent;text-transform:none;font-variant:normal;"><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">tax </span><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">advice</span></a> . Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent <a rel="nofollow" href="http://www.erollover.com/blog/ira-distributions/2009-401k-ira-required-minimum-distributions-changes#" id="KonaLink10" style="color:#009600;text-decoration:underline;cursor:pointer;font-family:verdana;border-top-width:0px !important;border-right-width:0px !important;border-bottom-width:0px !important;border-left-width:0px !important;border-top-style:none;border-right-style:none;border-bottom-style:none;border-left-style:none;border-top-color:transparent;border-right-color:transparent;border-bottom-color:transparent;border-left-color:transparent;background-image:none;background-color:transparent;text-transform:none;font-variant:normal;"><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">tax </span><span style="font-family:Arial;font-weight:normal;font-size:12px;border-top-width:0px !important;border-top-style:none;border-top-color:initial;border-left-width:0px !important;border-left-style:none;border-left-color:initial;border-right-width:0px !important;border-right-style:none;border-right-color:initial;border-bottom-width:1px;border-bottom-style:solid;border-bottom-color:initial;color:#009600;background-image:none;background-color:transparent;width:auto !important;">advisor</span></a> . The information source for this advisory is from ING-USA.</p><p><span style=""><strong>Please visit our site for more Retirement, 401k, and Insurance information:</strong><br><a rel="nofollow" href="http://www.erollover.com/" style="color:#cc0000;text-decoration:none;">www.erollover.com</a></span></p></span>