client is 71 and laid off was contribtuting to 401(k)
Hi,
we have a client who is 71 in 2010 and laid off now . he was contributiong to his 401(k) all along but now he is laid off. when does he have to take out his first RMD? Does it matter when he is laid off?
Permalink Submitted by Alan Spross on Thu, 2010-02-04 18:32
Assuming the separation is permanent, the 2010 RMD must be taken no later than the required beginning date of 4/1/2011. But if he waits until 2011, he will also have to take the 2011 RMD prior to 12/31/2011.
This assumes that he is not a 5% owner, did not reach 70.5 in 2009, and also that the plan uses the IRS definition of required beginning date rather than requiring all employees to start RMDs at 70.5.