73 and still working!

Submitted by Amanda Minter on Wed, 2020-08-26 17:37

Client is 73, owns a company, has a SEP and SIMPLE IRA and contributes to both every year. For 2020 we know there are no RMD requiremetns but let’s say for conversation sake the CARES act did not happen and we had a normal RMD requirement year. Since he is still working, does he have to take RMDs? and does that have to do with the fact he is 5% owner or because they are IRAs?



Submitted by Alan - IRA critic on Wed, 2020-08-26 18:36

All IRA owners must take RMDs and there is no exception for still working as there is for qualified plans for <5% owners of companies. While the IRA RMDs are required, client can still contribute to these plans without age limit.

Submitted by David Mertz on Wed, 2020-08-26 20:27

For what it’s worth, the law does not permit a particular company to have both a SEP plan and a SIMPLE IRA plan for the same year.  A company with a SIMPLE IRA plan is not permitted to have another plan.

Submitted by Alan - IRA critic on Wed, 2020-08-26 20:35

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