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Financial advisor Ric Edelman, founder of Edelman Financial Engines, is calling on Congress to immediately pass legislation that would waive a requirement mandating that Americans 72 years old and older take a Required Minimum Distribution for their retirement account.

financial crisis 4917915 640smallEdelman is suggesting that such activity would unnecessarily harm retirees who are forced to make withdrawals from their retirement accounts at a time when the market has taken a huge hit due to the coronavirus outbreak. "Millions of retirees are being forced to sell shares of their mutual funds and other investments while stock prices are down 30% or more," Edelman says. "In a great many cases, these retirees don’t need the money or can get the income they need from other sources. Forcing them to sell during this market downturn merely to satisfy an IRS requirement is punitive and unnecessary during these difficult times."

The situation is made worse, Edelman says, by the fact that the calculation for making this year’s RMD must be based on account values as of December 31, 2019. Current account values, he notes, are far lower. "Consider a 72-year-old whose IRA was worth $500,000 at the end of the year. If that account is now worth only $350,000, a retiree is required to withdraw 5.6% of the account’s value – far more than the 3.9% shown in IRS tables," Edelman says. "The market’s sharp decline is forcing retirees across the country to withdraw excessively large amounts from their accounts, triggering massive tax liabilities needlessly."

Read the full press release.

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