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RMD question
Old 08-30-2009, 08:07 PM   #1
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RMD question

My wife will turn 70 1/2 in March 2010. She is planning to keep working into 2010 but will probably retire before 2011.

She has a regular IRA and is still funding a 401K at her work. How does the fact that she will still be working affect RMD or does it?

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Old 08-30-2009, 08:27 PM   #2
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The IRA, yes, the 401k, no.

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Old 08-30-2009, 08:33 PM   #3
Dryer sheet wannabe
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Originally Posted by Sarah in SC View Post
The IRA, yes, the 401k, no.
The 401K isn't figured into RMD but the IRA is?
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Old 08-30-2009, 10:15 PM   #4
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You have to take RMD from the IRA but not from the 401K of the company where spouse is still working until she leaves that company.
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edit to add: (from a Forbes article by Ed Slott)

The ''Still Working" Exception

For those who have 401(k)s or other employer plans (not IRAs, self-employed plans or SIMPLEs), your required beginning date is the same April 1 date as for IRA owners, unless you are still working for the company where you have the plan. If you don't own more than 5% of the company, you can delay your RBD to April 1 of the year following the year you retire. This is sometimes called the "still working" exception to the RBD.
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If spouse leaves company in 2010, RBD is April 1, 2011 for 401K. If spouse turns 70.5 in 2010, RBD for IRA is same.
In this particular case,looks like actually no difference in RBD and RMD for IRA/401K but if she continued working into 2011,
then the 401K RMD would be delayed. RMDs are taken separately from both IRA and 401K
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Old 08-30-2009, 10:20 PM   #5
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Not sure what your question is but here's an IRS article:

Retirement Plans FAQs regarding Required Minimum Distributions

that might help confuse things even more
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