Retirement plan contributions while taking RMDs form IRA
What kind of plan may a self employed person continue to contribute to after 70 1/2. he must take IRA RMDs, but is still working so would like to continue to contribute to some kind of retirment plan, simple, sep, etc.. whatever is available to him at this point.
Can this be done some kind of plan? I have heard you can do it with a simple but I have seen info that is contrary to that. Also, can you even contribute to these plans when making RMD withdrawals or after age 70 1/2. Thanks in advance.
Permalink Submitted by Alan Spross on Thu, 2010-10-07 20:32
With either a SEP or SIMPLE IRA, you can continue to contribute as you work beyond 70.5, but you also must take RMDs from those accounts or at least add their value into your RMD calculation for all your IRAs. For a solo 401k you establish for your business you must take RMDs specifically from that plan since you are obviously a 5% owner. If you work as an employee who offers a 401k plan, with the vast majority of them you do not have to take RMDs until after you retire.
Permalink Submitted by David Kramere on Mon, 2016-01-04 03:28
I was specifically trying to determine if a person can contribute to a solo K while taking disgtributions.In IRS publication it specifically says it is OK on a 401(k) weather taking RMD’s or delaying if qualified to do so if under 5% owner. It then also goes on to say that solo-K(s) have all of the same rules as 401(k)s.Can anyonbe further confirm that this is OK?
Permalink Submitted by John Jawor on Thu, 2010-10-07 20:55
TY Alan.
I have similar guidance from other sources now and feel confident going forward. Thanks again.
Permalink Submitted by Alan - IRA critic on Mon, 2016-01-04 04:14
Yes, for the solo K you can still contribute while RMDs are required. This is also the case for SEP and SIMPLE IRA accounts.