RMD – Working part time
I know you have to start taking RMDs from IRA’s the year after you turn 70 1/2, and you do as well from a 401k. But you can delay those if you are still working at the place of employment and not a 5% owner. What I need to know there, does it matter how many hours you are working to delay those RMD from a 401k. If an employee goes from FT and 40 hours down to PT at 25 hours, can they still delay those RMD until they quit all together or is the drop in hours away from FT a catalyst for the RMD.
Thanks.
Permalink Submitted by Alan - IRA critic on Wed, 2016-10-26 20:23
There is no established answer because “retirement” occurs when the employment hours drop to a level defined by the 401k plan, not by the IRS. The participant would have to ask the plan administrator what the threshold is and if it is measured by weeks, months or other metric. The participant may then wish to establish a schedule that keeps them just over that threshold. Note that once RMDs begin, they do not cease when the hours are increased back over the threshold. Therefore, the participant must avoid ever falling short of the threshold.