There are other diaries about McCain's economic plan, but he misunderstands what retirees need. I am posting this diary because I want to focus on one aspect of his plan (and Obama's).
We retirees who have reached the "magic" 70 1/2 birthday are required to begin taking distributions (Required Minimum Distribution - RMD) from our IRAs, 401Ks, and 403Bs (teachers and gov't employees).
We HAVE to take a percentage out of our accounts each year thereafter or be penalized 50%. That's fair. We've been allowed to let our investments grow, tax-deferred, since the implementation of those bills.
The RMDs are figured based on the value of the accounts on December 31st of each year. Some of us have chosen to leave our funds in the accounts to continue to accrue interest and/or growth, tax deferred, until the end of the year.
Many of those IRAs and 401K/403Bs are invested in mutual funds and securities. If we are FORCED to take our RMD right now while the market is down, so many shares will have to be sold to equal the RMD amount, figured on Dec 2007 values, for this distribution year, our accounts will not last until the end of our lives.
We retirees need those Required Minimum Distribution laws to be SUSPENDED for at least the next 12 to 18 months to allow our shares to go back up. The choice of taking the RMD should be voluntary, of course. Some people need that money to live on, so it should be a choice to leave funds in the accounts without the 50% penalty until the market begins to recover or to take distribution now.