Employed and over 70.5 and contributing to 401k
I know this has been asked before in different scenarios but a physician, over 70.5 and taking RMD form various IRA’s yet still contributing to his practice’s 401k. What are the rules related to his ability to continue to contribute and how does this affect his RMD if any?
Permalink Submitted by Alan Spross on Wed, 2011-11-16 21:20
Anyone can contribute to a 401k regardless of age. However, RMDs do not have to begin for the 401k until separation from service for most employees. But a 5% or greater owner of the employing firm cannot delay RMDs until separation, but must start them at age 70.5, more specifically the required beginning date is 4/1 of the year following the year employee reaches 70.5. In many medical practices you would expect that the physician is a greater than 5% owner and not able to delay RMDs until after separation.
Whether RMDs are due or not, physician can still contribute. None of this affects his IRA RMDs.
Permalink Submitted by Nadeem Salem on Wed, 2011-11-16 22:08
Thank you.