McCain Calls for Suspension of Minimum Distribution Rules

I would have thought this was a bigger deal than McCain would lead us to believe having buried its announcement a third of the way through his stump speech, but I am kind of a geek:

[On October 10,] John McCain called for suspension of the requirement that retirees must begin liquidating their retirement accounts when they reach age 70 and a half, the latest economic policy rolled out by the Republican presidential candidate.

I’m a little dissapointed in the WSJ for stating the proposal that way because it is kind of misleading.  But, to be fair, their just echoing the misleading satements coming from the McCain campaign.  As Paul Caron (of the TaxProf Blog) points out here:

…there is nothing in the Internal Revenue Code or any regulation or ruling that says that retirement plan distributions must be made in cash. If the owner of IRA or 401(k) wants to keep the investments instead of selling them, the investments themselves can be distributed in what is known as an “in kind” distribution. So, contrary to what McCain claims, the present rules do not require retirees to “sell off their IRAs and 401ks”.

In-kind distributions are rare as they’re not suited for everyone but in a market that is as down as this one is, I would not be surpsised to see this option on the rise.

These decisions though should be part of a wholistic estate plan.  If you have questions you should call someone who knows what they’re doing and who does not have a stake in your ultimate decision.

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