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The IRS states: "You generally have to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA, or retirement plan account when you reach age 70½."
Ok. So that is "generally" true.

Suppose I'm still working beyond that age. I believe that the RMD for the (traditional) IRA would still apply, but does it also apply for the 401(k)? (Or is that dependent upon the local workplace rules?)

Why does the IRS say "generally"? I had always assumed it was a fixed rule (for the types of account that they mention).

culcha
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I believe that the RMD for the (traditional) IRA would still apply, but does it also apply for the 401(k)? (Or is that dependent upon the local workplace rules?)

Why does the IRS say "generally"? I had always assumed it was a fixed rule (for the types of account that they mention).


Because there are always exceptions.

For IRAs, you can actually delay the first withdrawal as late as April 1 of the calendar year following the year you turn 70 1/2, rather than the year that you do turn 70 1/2. Of course, that means you will end up taking 2 withdrawals during that year, because you still have to take the distribution for the year you turn 71 1/2 by Dec 31 of that same year. Of course, for someone who is still has significant compensation from work in the year that they turn 70 1/2, but will have significantly lower compensation from work in the year they turn 71 1/2, that might be a good way to minimize taxes.

For 401(k)s, the required distributions are dependent on rules for the plan. The IRS allows plans to let employees avoid RMDs while they are still employed, but the plan rules have to be set up to allow it.

AJ
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If a 401K plan allows deferring withdrawals while you are still employed, it is likely that the employment must be with that employer.

Although legal, don't expect that a previous employer's 401K plan will defer RMDs because of a job with a different employer. There is too much paperwork and liability. They have no reason to bother for a previous employee.
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Although legal, don't expect that a previous employer's 401K plan will defer RMDs because of a job with a different employer.

Is that legal? I thought that the law only allowed this exception for current employees.

That said, there's a simple solution to this issue - roll the money from the prior employer's 401(k) to the current employer's 401(k).

AJ
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Is that legal? I thought that the law only allowed this exception for current employees.

From a recent 401K meeting at work, I was led to believe it was legal.

The statement was my employer's plan allowed deferring of distributions while still working for them, but only while working for them because they weren't willing to track if you working for a different employer regardless of the reason for separation from current employment.
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