This shouldn't be headlines, except that this seemed to "flash" just briefly into the news earlier in the week before fading out with little trailing analysis. So here it is, just in case you missd it.
Of course, this will be followed by any significant developments to these new rules - which, though they are effective immediately, are subject to change.
Distribution Rules Just Got EASIER
Efective January 1, these are just a few of the new distribution rules to be followed - and, in most cases, enjoyed.
Life expectancy calculations got easlier - For purposes of calculating the minimum payout that must be taken from an IRA at age 70 ½, most account holders will now use a straight formula based on the account balance and a uniform life expectancy table. Reports say this table gives most everyone the best break possible - that is, permitting the smallest distribution calculable under the old system. And yes, this means no more messing with joint life expectancies, life expectancies, and whatnot to try and get yourself the least minimum distribution possible before tax penalties kick in. The exception: If you are more than 10 years older than your husband and wife, you may use your actual joint life expectancy to calculate payouts. Still, as with the uniform-table system, reportedly this should be the best scenario for these couples.
The guesswork is gone from distribution "methods" - What a concept: As of 2002, you will no longer need to pick a method of distribition (such as recalculation, etc.). Instead, you will instantly be allowed to take the lowest distribution that can be legally figured. Until next year, take heart if you've already chosen a method, as you will meanwhile be permitted to take the lowest amount possible base on age and account balance.
No more footsie over beneficiaries - There was a time one month ago when the account beneficiary you selected on the day withdrawals began had to stick, whether this character turned out to be worthy of public floggings by Ann Landers. No more - now you can now defer this decision until the December 31 of the year after your death. That's progress. Maybe the government will clarify it. (Meanwhile, you can change the beneficiary at any time after distributions start or up until you die, which is helpful here.) What's important is that the beneficiary's age won't affect - or change - the distributions required.
Go To Page: 1 2
