AARP Hails House Passage of One-Year Moratorium on Required Minimum Distributions From Retirement Accounts
Source: AARP Press Center | 2008-12-11
December 11, 2008
Contact: Danielle Holland 202-434-2597 dholland@aarp.org
AARP Hails House Passage of One-Year Moratorium on Required Minimum Distributions From Retirement Accounts
2009 Suspension Poised to Help to Offset Excessive 2008 Withdrawals
Washington, D.C. – In an effort to help give older Americans some much needed financial flexibility as they struggle to manage their finances during this difficult economic time, AARP has been working with Congress and the Administration to issue a temporary freeze on mandatory retirement account withdrawals. In response to this call to action, the U.S. House of Representatives late last night passed the “Worker, Retiree, and Employer Act of 2008,” which includes a provision to provide relief to older Americans who are required to make retirement account withdrawals after age 70 ½. While the legislation will not directly address the 2008 withdrawals, it is poised to help offset this year’s distribution by placing a one-year moratorium on required minimum distributions for 2009.
In response to the passage of the legislation, AARP Legislative Policy Director David Certner issued the following statement.
“On behalf of the older Americans who are struggling during these turbulent economic times, AARP is pleased that the House took decisive action to help alleviate the financial burden facing tens of thousands of seniors who have seen their retirement savings shrink dramatically. By making minimum withdrawals from retirement savings accounts optional rather than mandatory for next year, older Americans are poised to hold on to more of their diminished nest-eggs.
“While AARP had hoped to be able to get a temporary freeze for this year, the reality was that most older Americans had already taken their distributions. We will continue to pursue with Congress and the Treasury Department potential tax relief for 2008. But by freezing the withdrawals for next year, every older American -- who was forced to make a choice between taking a withdrawal that was calculated based on a much higher value in their retirement account or face a high tax penalty -- will be eligible for this financial relief.
“The Senate now has the opportunity to help ease the economic crunch facing far too many older Americans by also passing this legislation. We urge them to do so quickly, so that older Americans can begin the new year knowing that at least one important financial hurdle has been lifted, and they can begin in 2009 to rebuild a stronger economic foundation.”
AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 34.5 million readers; AARP Bulletin, the go-to news source for AARP's 40 million members and Americans 50+; AARP Segunda Juventud, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP.org. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
