New IRA Distribution Regulations & Two Plus Two Equals What?
Fourth Quarter 2000|Jim Williams| The IRS issued new proposed rules covering distributions from qualified plans and IRAs. The new rules are aimed at simplification and appear, at first blush, to achieve that objective. While these changes appear to be fortuitous, not all of the changes in the regulations are favorable. Here’s an interesting puzzle. Note that the mania driven NASDAQ (the tech and dotcom heavy over the counter exchange) was up something on the order of 80% in 1999. In the year 2000, the same index was down by approximately 40%. What was the annualized return for the combined two year period? The simple answer of subtracting 40% from 80% leaves 40%; divide by 2 (years) leaves about 20% per year right? Wrong. Two plus two equals what?