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WASHINGTON – The Treasury Department and the Internal Revenue Service recently released Revenue Ruling 2002-62 that will help taxpayers preserve their retirement savings when there is an unexpected drop in the value of their retirement savings. Some taxpayers began receiving fixed payments from their IRA or retirement plan based on the value of their account at the time they started receiving payments. Those taxpayers may now switch – without penalty – to a method of determining the amount of their payments based on the value of their account as it changes from year to year. The new rule will allow taxpayers to determine the amount of their payments based on the value of their account as it changes from year-to-year. That means, if the value of the account or IRA goes down because of market declines, an individual will be able to reduce the required distributions. In doing so the individual will not only avoid the extra tax, but will also be able to protect against depleting their retirement assets all together.

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