Retirement funds are taking a real beating and that’s just a fact. But many seniors can’t catch a break because they’re required to withdraw a certain amount of money from their retirement fund every year if they are 70 1/2 years old or older. The Worker, Retiree and Employer Recovery Act if approved by President Bush, will temporarily waive the stiff penalty imposed on seniors who fail to withdraw a prescribed minimum from their retirement accounts. Normally, if a senior citizen fails to withdraw the required amount from their retirement account, there is a 50% tax on the amount that should have been withdrawn, plus any income tax that would have been owed if the money had properly been withdrawn. If this bill is passed, seniors who don’t withdraw their required distribution will not suffer from the penalty.

Unfortunately, most senior citizens have already withdrawn their required distributions from their retirement accounts for 2008 or are suffering from the penalty because they failed to withdraw their money. But it is good to see Congress taking steps to protect seniors who are especially vulnerable at this time to the fluctuations in the market that are gnawing away at everyone’s retirement funds.

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