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Have You Taken Your Minimum Required Distribution?

By John Grobe

Sunday, March 8, 2009

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John Grobe is a retired federal employee with over 25 years of experience in federal human resources and President of Federal Career Experts, a training and consulting firm that specializes in federal employee retirement and career transition issues.

Did you reach the age of 70 ½ in 2008?

If you have not already taken a minimum required distribution (MRD) from your Thrift Savings Plan (TSP) or your Individual Retirement Account (IRA) for 2008, you must take it by April 1, 2009 (See Taxes and Your 2009 TSP Distributions: How To Lower Your Taxes). An initial MRD can be postponed until April 1st of the year after the year in which the account holder turns 70 ½. However, it is still considered a distribution for the year in which the age 70 ½ was attained.

The fact that Congress and the President eliminated the requirement to take a minimum required distribution in 2009 has nothing to do with a 2008 initial MRD that is taken in 2009. The 2008 distribution must be taken.

What if you turn 70 ½ in 2009? Then you won't have to take your initial distribution.

The initial MRD is the only one which can be pushed into the next year. After taking an initial distribution, all subsequent distributions must be taken by December 31st.
 

© 2009 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

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Readers' Comments

  • The MRD is partly ameliorated by the fact that the percent of withdrwal on the begining years balance. Therefore, if the begining balance is down 30%, your required withdrawal is down 30%...
    Posted: March 10, 2009 12:37 PM
  • Does it look to you like this 'Barron's Bottom' rally is just about over?...
    Posted: March 10, 2009 11:55 AM
  • Why aren't all "mandatory" distributions for those age 70-1/2 deferred until this banking/stock market fiasco turns around? Seems very unfair to force these folks to draw down retirement accounts when everyone knows the majority of these retiree's are going to take a big loss! Financial Advisers a...
    Posted: March 10, 2009 11:19 AM

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