SIMPLE & RMD’s

Submitted by Michael Eastham on Wed, 2019-03-13 16:42

Bob turns 70 on June 15, 2019. He is a 98% owner of his engineering firm and they have a SIMPLE IRA. Here are my questions:
1. Can he contribute during 2019 even though he reaches 70.5 in December?
2. Can the company make contributions on his behalf beyond 70.5 since he is the majority owner?
3. Is he able to contribute to the SIMPLE beyond 70.5?
Thanks



Submitted by Alan - IRA critic on Wed, 2019-03-13 17:17

  1. Yes, contributions can continue to all retirement accounts after 70.5, with the one exception being traditional IRA contributions. For SEP and SIMPLE IRA account, contributions continue while RMDs are coming out.
  2.  Yes, company matching or non elective contributions can continue regardless of age for all participants.
  3.  Yes, Bob can continue to make salary reduction contributions without regard to age. Further, since 2019 is his first RMD distribution year, he can defer all or part of the 2019 RMD until 4/1/2020, and can also satisfy his SIMPLE IRA RMD from any of his other owned non Roth IRA accounts if he wishes.

Add new comment

Log in or register to post comments