Oct 14, 2008
ALEXANDRIA, Va., Oct. 13 Probably the country’s leading organization for those who provide assisted living and the residents and families they serve, has requested that Treasury secretary Henry M. Paulson Jr. temporarily suspend regulations that are currently forcing seniors to withdraw money from retirement accounts.
Assisted Living Federation of America (ALFA) President/CEO Richard P. Grimes, is reported as saying that the decline in the stock market represents devastation for seniors who are relying upon their retirement savings to pay their expenses. In addition, he says that the association sees it as being wrong to penalize these retirees a second time by forcing them to withdraw money from depressed 401 (k) accounts.
According to federal regulations seniors who are 70 1/2 years of age or older are required to withdraw a minimum amount from their 401 (k) accounts each month or else they must pay a tax penalty amounting to 50 percent of the scheduled disbursement. The sum of the withdrawal was based upon the total value of the account, but this was before the recent remarkable decline in the stock market.
Just last week alone, retirement accounts for US consumers dropped by more than one trillion dollars in value and during the last fifteen months, almost two trillion dollars.
Grimes says that when Congress set up the 401 (k) program, it never anticipated this sort of market decline or how it would impact seniors who spent years carefully saving and planning for retirement. According to Grimes, seniors who use retirement savings for living expenses are not in the position to wait years for the market to recover. He says that they need some relief now.
Senators John McCain of Arizona and Barack Obama of Illinois, the two major presidential candidates, have called for deferral of the tax penalties for retirees. 401 (k) tax policy, is regulated by federal law but some lawmakers say that the Secretary of the Treasury has the power to temporarily suspend the regulations.
ALFA is an organization that represents professionally managed assisted living companies along with the residents they serve. Throughout the U.S. there are more than one million seniors living in assisted living communities. The majority of resident, fully 90 percent of those living in private assisted living communities use personal or family funds to pay for their assisted living expenses.
While raising the bar for excellence, ALFA also serves as the voice for senior living. ALFA acts as a major advocate for the informed choice of the individual, for quality care, and for accessibility for all Americans needing assistance that includes long-term care.
Tags: Insurance News