Friday, October 10, 2008
McCain proposes allowing seniors to delay withdrawals of deflated IRA assets
John McCain has suggested that, if he were elected, he would urge repeal of tax rules that require mandatory distribution from IRA’s (or 401K's) on a schedule starting at age 70-1/2. Or it might be delayed at least one year. The point is to protect the retiree from having to sell deflated assets until they have time to recover their value, as well as to avoid burdening the retiree with income taxes on the distribution.
SmartMoney has a page “Understanding the IRA Withdrawal Rules” here.
The “First Read” column on MSNBC quotes him directly:
My friends, we have to protect investors, especially those relying on their investments for retirement," McCain said five minutes into his remarks. "Current rules mandate that investors must beginning to sell off their IRAs and 401ks when they reach age 70 and a half. To spare investors from being forced to sell their stocks at just the time when the market is hurting the most, those rules should be suspended”
And columnist Adam Aigner-Treworgy notes that McCain gave no other explanation.
Since Obama says that seniors making less than $50000 a year would pay no taxes at all, Obama may be making a similar "promise." It was Gerald Ford in the 1970s who warned about Jimmy Carter's "promises."