RMD and workplace retirement plan
If an employee, age 71, worked for part of a year and continued participation in the emloyer plan, then retired mid-year, are they required to take their RMD for 2016? Thanks. Mary Gies
If an employee, age 71, worked for part of a year and continued participation in the emloyer plan, then retired mid-year, are they required to take their RMD for 2016? Thanks. Mary Gies
Permalink Submitted by Alan - IRA critic on Wed, 2016-10-12 17:48
Yes, 2016 will become an RMD distribution year. However, the first year RMD can be deferred up to 4/1/2017, which might be beneficial to equalize taxable income between 2016 when they worked and 2017. If an IRA direct rollover is planned in 2016, doing the direct rollover will result in RMDs for the year of the rollover being distributed at the time of the rollover and therefore the 2016 RMD could not be deferred until 2017. I am assuming the employee is NOT a 5% owner of the company AND reached 70.5 in 2015.