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I'm 70 1/2 years of age, I still work. My 401k Administrator notified me that I need to begin my distribution.
#1 What are the tax implications should I elect to
begin taking partial distributions?
#2 What are the tax implications should I elect to
defer taking any distributions?

I hope to work maybe another two years...
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Well, the tax implications of taking the minimum required distribution in your 70th & 1/2 year is that you will be taxed at ordinary income tax rates on that distribution. At your age, the minimum required distribution is a little under 4% (see Pub 590, page 79) and rises each year such that it is approximately 10% by age 90.

The tax implications of not taking the minimum required distribution is a disaster; it is called a 50% excess accumulations tax. The 50% tax applies to the amounts that should have been distributed but were not.

TheBadger


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Greetings, Gonsailing1, and welcome. You wrote:

<<I'm 70 1/2 years of age, I still work. My 401k Administrator notified me that I need to begin my distribution.
#1 What are the tax implications should I elect to
begin taking partial distributions?
#2 What are the tax implications should I elect to
defer taking any distributions?



I hope to work maybe another two years... >>

TheBadger gave you some excellent comments. Just to add to his remarks, though, you might want to check again with your plan administrator. If you continue to work for the plan provider for the next two years, a recent law change allows you to continue to do so without taking minimum required distributions until you actually leave that job. Unless you own 5% or more of the business, you can't be forced to take MRD until you leave that employment. If that's true in your case, then the money can sit there without penalty until you actually cease work.

Regards..Pixy
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You would be advised to setup a roll/over IRA with a
brokerage house you are comfortable with; then you would have a mechanism to roll/over monies from the
401k plan without creating an immediate tax liability.
It is important to discuss with the plan administrator
how to implement this to avoid running foul of any IRS
implecations.If you have specific problems post them on the 'fools' TAX message board. Hope this gets you started on the process. Best wishes for your retirement
- - Matthew
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