In a related item, the Financial Services Institute, the broker/dealer lobbying organization, is calling on the Treasury Secretary to suspend required minimum distributions from IRAs. Forced withdrawals during the current financial crisis will only exacerbate the problem, it says. According to FSI:
"The Financial Services Institute joins the AARP in calling for an immediate temporary freeze of mandatory retirement account withdrawals. As you are aware, the recent market turmoil has had a devastating impact on the savings of American retirees. Without immediate intervention, the current IRA distribution requirements will serve to compound this problem by forcing retirees to choose between stiff tax penalties or the liquidation and distribution of withdrawals based upon inflated retirement account balances. The Department of Treasury could greatly alleviate this problem by making current year distributions optional. We urge you to take this important step immediately."
For more information, visit www.financialservices.org.
