The nation’s leading organization for assisted living providers and the residents and families it serves is calling upon Treasury secretary Henry M. Paulson Jr. to temporarily suspend regulations that force seniors to withdraw money from retirement accounts. “The decline in the stock market is devastating for seniors who rely upon their retirement savings to pay their expenses,” said Richard P. Grimes, the President/CEO of the Assisted Living Federation of America (ALFA). “It is wrong to penalize these retirees a second time by forcing them to withdraw money from depressed 401 (k) accounts.”
Federal regulations require that seniors who are 70 ½ years of age or older to withdraw a minimum amount from 401 (k) accounts each month or else pay a tax penalty that amounts to 50 percent of the scheduled disbursement. The amount of withdrawal was calculated upon the total value of the account before the recent dramatic decline in the stock market.
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