REQUIRED MINIMUM DISTRIBUTION RULES

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=90 BGCOLOR="#006699" TEXT="#080000" bgproperties="fixed" background="039285a1erlcgo.png"> <div> <FONT SIZE="5" COLOR="#FFCC66" FACE="Arial" ><B>LIFE, DISABILITY, MEDICAL, MEDIGAP, DENTAL, LTCI and ANNUITIES </B></FONT><B>     |     </B><A HREF="index.htm" TARGET="_top" TITLE="LIFE, DISABILITY, MEDICAL, MEDIGAP, DENT"><U><B>home</B></U></A></div> <div>                                                   </div> <div> </div> </td> </tr><tr> <td valign="top" width=210 BGCOLOR="#FFCC66" TEXT="#080000" background="038d2c00dkelyh.png"> <div> W. Forrest Veal, CLU</div> <div> P. O. Box 700222</div> <div> Dallas, TX 75370</div> <div> 972 250 6516</div> <div> 1 888 845 8325</div> <div> Fax 1 775 542 0808</div> <div> Email - vbsinsurance@juno.com</div> <bR> <div> <A HREF="http://www.newrmd.com" TARGET="_top" TITLE="http://www.newrmd.com"><U>RMD Calculator</U></A><FONT SIZE="3" COLOR="#003399" FACE="Arial" > </FONT></div> </td> <td valign="top" height=390 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <I>REQUIRED MINIMUM DISTRIBUTION RULES</I></div> <bR> <div> In January 2001, the Internal Revenue Service issued new proposed regulations simplifying the minimum distribution requirements for IRA's, qualified plans and tax sheltered annuities. The following summary of the changes are for information only. It is important for you to consult with your legal and tax advisors to determine how the changes apply to your particular situation.</div> <bR> <div> The new minimum distribution rules are simpler and much more taxpayer friendly than the old rules.</div> <bR> <div> A significant change deals with when you must have a "designated beneficiary". Before the new rules, a person must have designated an individual as a beneficiary of his or her IRA account on or before the required minimum distribution date (April 1st of the year following the year that he or she turned 70 1/2).  That rule no longer applies and instead, the IRA owner can designate a beneficiary at any time before or after reaching 70 1/2. This means that uninformed seniors can avoid falling into the trap of forgetting to make a proper designation and paying a stiff price for that oversight. </div> <bR> <div> Under the old rules, you had to decide before your required minimum distribution date whether to recalculate or not recalculate life expectancy and also whether to use joint life expectancies. With the new rules, you get all the benefits of recalculation without the pitfalls and now the IRS is publishing one "uniform table"  that almost everyone will use to determine the current minimum distribution. One exception to the use of the"uniform table" is, if the IRA owner's spouse is more than 10 years younger, then the actual joint life expectancy of the couple is used to determine minimum distributions.</div> <bR> <div> For those interested, the changes should result in a lowering in the amount of required minimum distributions.</div> <bR> <div> In addition, you will not need to calculate the amount of the minimum distribution; it will be done by the IRA custodian. The custodian in turn will also report the amount of required minimum distribution under the law and the amount that was actually distributed. </div> <bR> <div> The new rules will also be available with 401 (k) plans, assuming that the 401 (k) plan adopts the amendments suggested by the IRS. Until they do, however, 401 (k) plans continue to operate under the old rules which provide you with another great reason to consider rolling out of your 401 (k) and into an IRA, when you are no longer eligible to contribute to the 401 (k).</div> <bR> <div> <B>To return to the Table of Subjects, click on "home" in the above blue border.</B></div> </td> </tr></table></body>