August 1, 2009: IRA's And Other Employer-Sponsored Retirement Plans Face Uncertain Distribution Fate

Retirement-bound investors face an uncertain future for mandatory withdrawal of funds from applicable accounts unless Congress acts on one of several pieces of legislation. The Required Minimum Distribution (RMD) will be back in effect for 2010, which means investors must begin withdrawing money from their accounts when they reach 70.5 years of age and pay appropriate taxes, if any. The RMD requirement was waived for 2009 when the Worker, Retiree and Employer Recovery Act of 2008 became law on December 23, 2008.

There have been a number of bills introduced in Congress, any of which would extend the RMD waiver past 2009, or, to increase the minimum age that triggers the RMD from 70.5 to 75 years of age.

Here are the bills to date:

S. 157: Extends the temporary waiver of the RMD rules for certain retirement plans and IRAs through 2010.

H.R. 124: Extends the temporary waiver of the RMD rules for certain retirement plans and IRAs through 2010.

H.R. 882: Increases the age at which RMDs are required to begin from age 70.5 to age 75.

H.R. 2021: Extends the temporary waiver of the RMD rules for certain retirement plans and IRAs through 2012.

H.R. 2331: Increases the age at which RMDs are required to begin from age 70.5 to age 75. This bill also waives the 10% penalty on distributions from qualified retirement plans for mortgage payments on qualified residences and in situations of unemployment.

H.R. 2637: Increases the age at which RMDs are required to begin from age 70.5 to age 75, and extends the temporary waiver of RMD rules for certain retirement plans and accounts through 2010.

None of these bills have reached a terminal status of consideration, and all, some or none may gain momentum.

A friendly call or e-mail to your Representative and Senators to express your view is timely during the upcoming recess.