ALFA Calls for Relief for Seniors
Posted : Mon, 13 Oct 2008 16:28:50 GMT
Author : Assisted Living Federation of America
ALEXANDRIA, Va., Oct. 13 /PRNewswire-USNewswire/ — The nation’s leading organization for assisted living providers and the residents and families they serve is calling upon Treasury secretary Henry M. Paulson Jr. to temporarily suspend regulations that force seniors to withdraw money from retirement accounts.
“The decline in the stock market is devastating for seniors who rely upon their retirement savings to pay their expenses,” said Richard P. Grimes, the President/CEO of the Assisted Living Federation of America (ALFA). “It is wrong to penalize these retirees a second time by forcing them to withdraw money from depressed 401 (k) accounts.”
Federal regulations require that seniors who are 70 1/2 years of age or older to withdraw a minimum amount from 401 (k) accounts each month or else pay a tax penalty that amounts to 50 percent of the scheduled disbursement. The amount of withdrawal was calculated upon the total value of the account before the recent dramatic decline in the stock market.
Retirement accounts for US consumers lost more than one trillion dollars in value last week and almost two trillion dollars in value in the last 15 months.
“Congress never anticipated this sort of market decline or its impact on seniors who spent years carefully saving and planning for retirement,” said Grimes. “Seniors who use retirement savings for living expenses cannot afford to wait years for the market to recover. They need some relief now.”
The two major presidential candidates, Senators John McCain of Arizona and Barack Obama of Illinois, have called for suspension of the tax penalties for retirees. While federal law regulates 401 (k) tax policy, some lawmakers say that the Secretary of the Treasury has the authority to temporarily suspend the regulation.
ALFA represents professionally managed assisted living companies and the residents they serve. More than one million seniors live in assisted living communities throughout the nation. Nine out of ten residents in private assisted living communities pay for their assisted living expenses with personal or family funds.
ALFA raises the bar for excellence and serves as the voice for senior living. ALFA advocates for informed choice, quality care, and accessibility for all Americans needing assistance with long-term care.
SOURCE Assisted Living Federation of America