Congress passed emergency legislation in December that suspends the requirement that individuals over the age of
70 ½ must take minimum distributions (withdrawals) from their retirement plans, such as 401(k)s and IRAs. The waiver is for 2009 only.
Congress made this change so retirees aren’t forced to take out money from retirement plans at a juncture when account values are down due to the big stock market losses in 2008.
ACTION STEP: If you are over 70 ½ years old, and do not rely on income from your 401(k) or IRA to cover your living expenses, you do not have to take a penny out of those accounts in 2009. The IRS is not enforcing the RMD rule in 2009. If you can afford to leave those accounts untouched, I say do it. The less you cash in today—at today’s depressed prices—the more you have left for later years, and the more money that has the potential to grow for you over the years.