Still working and contributing to 401k @ 70 1/2
My client has IRA and 401k money. We know about rmd’s on IRA’s.
But, she is working full time and contributing to 401k plan (she is not a owner). She was employed by the corp for 20+ years and several years ago she separated from service. After 2 years off, she went back. That was 3 years ago.
Is she required to take an RMD from the 401k assets due to her previous separation from service?
Any help is greatly appreciated.
Permalink Submitted by mk foss on Tue, 2008-12-16 21:33
No. As long as she has not been a 5% or greater owner for more than 2 years, she can defer RMDs from the employer 401k plan until she retires (again).
The good news is that she can continue to participate in the plan.
Of course the IRA RMDs must continue (except for 2009).