RMDs are calculated by taking the account balance as of the preceding year divided by the life expectancy factor from a uniform table. Thus, RMDs for 2009 would have been based on account values as of December 31, 2008. Unfortunately, no relief was provided for 2008 RMDs, so many retirees found themselves taking large RMDs that were based on account values as of December 31, 2007. After December 31, 2007, their account balances had declined significantly, so they were forced to sell at depressed prices and remove a significantly larger percentage of their current account balance from their account.

This suspension is only for 2009, so unless further legislation is passed, RMDs will be required again in 2010. Even though you do not take an RMD in 2009, your life expectancy factor will decline by one year when calculating the 2010 RMD.