Post 70 part-time work and delaying RMDs
I have a client who is over age 70 and retiring from his full time position next month. He has substantial 403b assets and has been told by his employer that his new “post full-time retirement” position (part time but above 20% employed) allows him to continue to contribute to his 403b and also delay his RMDs until a point that his position takes him below 20% employed. This was told to me by an HR rep in his employers office. Is there any hard ruling on what his considered retired, his position is part time as I mentioned and we had planned on this being an RMD year.
Permalink Submitted by Alan - IRA critic on Tue, 2017-06-06 23:13
There is no specific provision, therefore the individual employer plan defines their own thresholds. But to know that 20% applies for this plan is not that helpful unless client knows exactly how and when the 20% is determined. If at anytime the client falls below 20% due to a slow month or any other reason, an RMD distribution year is triggered and once RMDs start for a given plan, they do not stop again even if client goes back over 20%. So client still has some more questions to ask.