New IRA Tax Rules

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NOTE: On January 11, 2001, the IRS issued a new set of proposed regulations dealing with IRAs.
The new regulations make major changes in the required distribution rules (both during life and after death of the IRA owner).

Turn 70 Lately?

Were you were born from July 1, 1930 to June 30, 1931? If so, Happy (belated) 70th Birthday!

We dont want to dampen the celebration, but watch out! You turn 70 this year (2001). Who cares about turning 70? You should, if you have an IRA or a qualified retirement plan, because turning 70 has important financial consequences.

For starters, you need to make sure you have a complete copy of your plan documents (they contain important provisions, and sometimes scary surprises). Then, work with a qualified advisor to review your plan documents and your beneficiary, calculation and other options.

Under an IRA, you should do the following:

If you haven't already done so, name your beneficiaries (who you name can have important consequences);

Determine the minimum distribution table that will apply (there are now only two tables to worry about); and

By April 1, 2002, take your first distribution (but consider taking your first distribution in 2001, to avoid a 2002 double-up).

Your failure to act in a timely fashion can cause you and your beneficiaries to forfeit important tax-deferral benefits of your IRA. Similar rules apply to many non-IRA retirement plans.

Dont delay. If you snooze, you lose!

Additional Information

Additional Information on IRA's can be found on the following pages:

New IRA Rules

Does My IRA Really Say That?!?!

[Updated May 6, 2001]