401k contributions?

Submitted by Geoffrey Kasher on Sat, 2021-07-24 15:56

Client born 06/21/1950 and still working.

Does he have to take RMD and can he still contribute?

Thanks



Submitted by Alan - IRA critic on Sat, 2021-07-24 17:07

Contributions can be made without regard to age. Unless client owns >5% of the company, as long as he has not retired prior to year end, there will be no RMDs starting next year when he will reach 72, the new age for RMDs. That said, in some very limited plans, his RMDs must start at 72 even without being a >5% owner, but this is rare. 

Submitted by Geoffrey Kasher on Tue, 2021-07-27 15:53

The company is a non-profit and most likely the client is listed as the owner.

Submitted by Alan - IRA critic on Tue, 2021-07-27 16:42

Then he will have to start RMDs for 2022, although he can delay the 2022 RMD until 4/1/2023 if he does not mind having two years of RMDs taxable in 2023.

Submitted by Geoffrey Kasher on Tue, 2021-07-27 20:29

Thanks

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