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What's PlayingBazaarsNov. 21
St. Stanislaus School benefit, 9 to 4 in Kolbe Hall, Adams. Bake sale, snack bar, games, Chinese auctions, money raffle, crafts, and pierogi.
Blackinton Union Church, 1373 Massachusetts Ave., North Adams; 10 to 2. Crafts table, bake sale, Chinese auction, the Christmas table, and kid's grab bag. Lunch $4, $2 kids.
First Congregational Church, North Adams, 9-2.
Nov. 28
Becket Federated Church, Route 8, holiday bazaar from 9-3. Lunch, crafts, baked goods, holiday and other items. Information: Mary Peltier, Parish House, 413-623-5217.
Dec. 5
Holiday Fair at First Congregational Church, 25 Park Place, Lee, from 10 to 3; handcrafted items, raffles, children's shop, bake sale, cut Christmas trees and lunch from 11 to 1. Includes angel-themed goods from SERRV. Information, 413-243-1033 or www.ucc-lee.org.
Dec. 12-13
North Adams Country Club, crafts 9-4; food from That's a Wrap from 11-2. Information: Sheryl Morehouse at 413-822-3329.
Planning a bazaar this season? Submit information to info@iberkshires.com to have it listed here. |
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The Independent Investor: Take your Minimum Required Distribution NowBy Bill Schmick
iBerkshires Columnist
08:53PM / Thursday, December 25, 2008
I've fielded a number of calls lately from clients over age 70 1/2 who are required to take a minimum required distribution (MRD) from their tax-deferred accounts before the end of the year.
The rules state that everyone who owns a traditional IRA (and certain other types of defined contribution retirement accounts) must begin to liquidate these savings after they reach 70 1/2 years of age. This is to ensure that no one escapes taxation and that the money one accumulates through retirement savings is actually distributed during retirement. The yearly sum is calculated on a formula table that liquidates the entire account over the remaining estimated lifetime of the taxpayer.
There has been a degree of confusion lately over whether that distribution has been waived for this year. That is because some members of Congress have joined forces with AARP in lobbying for a moratorium on taking an MRD this year. I understand their motivation.
Most savers' IRAs are invested in stocks and mutual funds as a matter of course and since global stock markets only peaked in October 2007, most IRAs were still sporting hefty gains by the end of the year. Why is that important? Because the MRD payout percentage is based on the worth of one's IRA on Dec. 31 of each preceding year, in this case, 2007.
Since then, as most readers know, those same portfolios have taken a huge hit. In 2008, the markets and most IRA portfolios are down between 30 percent and 50 percent. As a result, the percentage of each portfolio required to be liquidated today is far larger than if we were to use the current value instead. In addition, once the IRA holder who must take a distribution cashes out of his stock or fund at a loss, he eliminates any chance to participate in a market rebound we may potentially experience in 2009.
Unfortunately, although there has been a lot of talk, no action has been taken to alleviate this problem for this year. Instead, the House and Senate have passed the Worker, Retiree and Employer Recovery Act of 2008. It addresses a whole bunch of issues including a provision that would suspend the MRD for 2009 but not 2008. It is another case of closing the barn door after the horse has escaped. Still, I guess something is better than nothing.
"I simply won't take a distribution," said an angry client on hearing the news, "I'm 75, what are they gonna do, lock me up?"
Well, no, I said, the IRS doesn't need to do that. Instead, the government levies a 50 percent penalty tax against any shortfall in your required distribution. Talk about adding insult to injury! I suggest anyone who has been delaying taking their MRD do so before the end of they year.
One final note to all my readers: over this last year of tumult and pain, I feel all of you have become part of my family through your comments and inquiries. As you know, both Christmas and Hanukkah are celebrated this week. I can't think of anything that fulfills me more than being with family at this time of year.
So I wish a very merry holiday season to you and yours. As for me, my daughter will be visiting and sharing both holidays with me and my wife. Life can't get much better than that!
Bill Schmick is a licensed investment adviser representative and portfolio strategist as well as a registered financial planner with Berkshire-based Dion Money Management, which manages more than $500 million for middle-class Americans from coast to coast. Direct your inquires to Bill at 1-877-850-7942, Ext. 146, (toll-free) or e-mail him at wschmick@dionmm.com. You can also visit www.afewdollarsmore.com for more of Bill's insight. |
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