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putney
New Member

If u r still working after 70.5, do u still have to take the RMD from a traditional retirement account?

 
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2 Replies
JillS
New Member

If u r still working after 70.5, do u still have to take the RMD from a traditional retirement account?

Hello putney,

Here is some information from a few different sources.  It looks like the bottom line is with a traditional IRA you must start taking the RMD.  With a traditional 401(k) maybe not, see the details below and in the links to the original articles.

Traditional 401(k) -

Regardless of age, if you are still working you can continue to contribute to a 401K.  As long as you own less than 5% of the business you are working for, you are not required to take RMDs. http://www.investopedia.com/articles/retirement/09/over-70-retirement-plans.asp

Required Minimum Distributions (RMDs) generally are minimum amounts that a retirement plan account owner must withdraw annually starting with the year that he or she reaches 70 ½ years of age or, if later, the year in which he or she retires.

However, if the retirement plan account is an IRA or the account owner is a 5% owner of the business sponsoring the retirement plan, the RMDs must begin once the account holder is age 70 ½, regardless of whether he or she is retiredhttp://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Required-Minimum-Distributions

When RMDs start 

In most cases, the so-called "Required Beginning Date" is the year after you turn 70½. If you are older than that but are still working for the employer sponsoring the plan in question, and assuming you do not own 5% or more of that employer, you can further postpone RMDs until you retire. But the Required Beginning Date for traditional IRAs is always the year after you turn  70½ regardless of whether you are still working.  http://www.workforce50.com/Content/Articles/CY9-Required-Minimum-Distributions.cfm

Hope that helps!

Carl
Level 15

If u r still working after 70.5, do u still have to take the RMD from a traditional retirement account?

Yes. Your first RMD must be taken by April 1 of the year after you turn 70½. Subsequent RMDs must be taken by December 31 of each year. If you don't take your RMD, you'll have to pay a penalty of 50% of the RMD amount.

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