Re: 2009 Planning: Retirement Plan Distributions

Dear Client:

Your company retirement plans and IRAs may be among the largest, if not the largest, asset that you have.
Therefore, one of the most important planning areas for you is taking distributions from your IRAs and qualified
retirement plans. You have a great opportunity to plan your distributions to meet your personal financial and
estate planning objectives. Understanding the basic tax rules and then planning accordingly is essential. We can
explain the basic rules and provide some strategies for you to consider as part of your overall tax plan.

Some taxpayers may consider early retirement as a viable option. However, generally, a distribution made
before you are 59 1/2 years of age is subject to a 10% penalty in addition to the tax otherwise payable on the
distribution. There are some exceptions. The penalty may not apply for certain hardship cases, for first-time
home buyers, or to pay certain medical or education expenses. Many distributions may be received tax free if,
they are transferred to an IRA or another eligible plan within 60 days of the distribution.

In general, there is also a penalty for failure to commence distributions by a certain age. Minimum distribution
rules are imposed to prevent participants from unreasonably deferring the tax on their retirement savings.
However, many taxpayers would be forced to sell assets that have lost significant value in order to meet the
minimum required distribution rules. Therefore, Congress passed a moratorium on these rules for 2009.

For some taxpayers, the economic downturn provides an opportunity to take a distribution and pay tax in order
to use the proceeds to buy back the same assets at the current low price. Any subsequent recovery would then
be taxed as a capital gain.

Navigating between the rules of when and how retirement distributions are taxed can be intimidating. However,
we can help you make the right choices that will minimize your tax burden, meet your financial needs and
comply with tax regulations. Please give our office a call at your earliest convenience to discuss your retirement
plan options in view of your overall tax plan.

Sincerely yours,