No "Required Minimum Distributions" in 2009

Not long before leaving office, President Bush signed into law a potential tax break for retirees. The break applies applies to IRA, 401(k) and 403(b) owners who are at least 70½. Lawmakers temporarily suspended (for tax year 2009) the "required minimum distribution.

Retirement-plan rules generally mandate minimum annual distributions once the account owner reaches 70½, even if the owner doesn't need the money right away and would rather leave it invested.

Congress decided to suspend that requirement because so many retirement accounts have been hit hard by the market downturn. The idea is to allow time for account values to recover before forcing retirees to take their money out.

Note that this change does not impact distributions required to be taken by April 1, 2009 for the 2008 tax year. Those must still be taken as previously scheduled.