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.



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.

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