Johnnyc300
Returning Member

Does change to part time employee status change RMD requirements?

If you are over 70 1/2 years old, a full time employee, contributing to the 401K and change to partime employee status (at the same company), stop contributing to the 401K, do you have to take the 'Minimum Required Distribution' ?

MargaretL
Expert Alumni

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No - part time status doesn't change RMD requirements, the fact that you work does. You do have to make mandatory withdrawals from your IRAs once you reach 70 and 1/2. However, you can delay taking RMD from your current employer-provided plan, such as your 401(k), until April 1 of the year after you retire.

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sguandal
New Member

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I retired 6/30/2017. Was re-hired part time the next day by the same Academic institution at 40% effort. I then took my deferred RMD for 2018 before April 1 2019; but now I am wondering if I should take at all the 2019 RMD before December 31 2019 or if instead I should take NO RMD since I am still working?

dmertz
Level 15

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sguandal, the statute is ambiguous with regard to this situation.  For those who have reached age 70½ and are still working, the statue specifies that RMDs must begin April 1 of the year following "the calendar year in which the employee retires."  The plan administrator is responsible for enforcing the RMD requirements, so ask the plan administrator whether they consider you to have "retired," making you subject to RMDs.

 

Generally speaking, once an individual becomes subject to RMDs from a plan, the RMDs cannot stop.  Given this, if the plan required you to take an RMD for 2018, you are required to take RMDs from the plan for 2019 and beyond.  So the question then becomes, "Was the distribution you received in early 2019 an RMD or was it a distribution that simply equaled the amount that your RMD for 2018 would have been had you been considered to be retired in 2018, but not actually a required distribution."  Ask your plan administrator.