RMD’s While Still Working
I have a client who owns a small business. The business has a Simple IRA set up and he contributes to the Simple. He turned 70-1/2 in 2015. Since he is still working, and contributing to the Simple IRA, does he have to take an RMD from it for 2015?
Thank You.
Permalink Submitted by Alan - IRA critic on Thu, 2015-11-19 23:36
Yes, although his 2015 RMD can be deferred to as late as 4/1/2016. The still working RMD exception applies to qualified plans, but not to SEP or SIMPLE IRA accounts. But even for qualified plans, owners of 5% or greater of the business must also start RMDs at 70.5, so for small business owners it is difficult to avoid RMDs at 70.5. If this was a side business and client also worked for a company with no ownership, he may be able to roll his IRA assets (SIMPLE IRA only after 2 years) into the plan in which he was only an employee and that would postpone RMDs for the bulk of his retirement assets.