72 still working part time and contributing to 401k
Client is still working but part time. He is still contributing to his 401k. He turns 73 in 2025.
Questions:
1. when he turns 73 in 2025 and still working part time, he does not have to take an RMD from his 401k, is that correct even though its part time?
2. He can delay the RMD from his 401k at work up to what age or is there an age limit even when you are working?
Thank you.
Douglas
Permalink Submitted by Alan - IRA critic on Thu, 2024-01-18 20:22
The IRS has not defined what minimum work schedule qualifies for the exception, but the consensus is that as long as the employer considers the employee still employed, they qualify for the exception. There is no age limit for the exception either, but the employee cannot be a >5% owner in their first RMD year, or they don’t qualify. Note that if an employee retires effective 12/31 (or of course any earlier) in a year, they are not treated as “still working” for that year.