Contributions after age 70 1/2 for owner
Posted 22 November 2006 - 06:30 PM
Posted 23 November 2006 - 10:05 AM
I have a very small 401(k) plan where the owner is going to start having to taking an RMD this year. Question, as he is still working full time, can he continue to contribute to the plan (deferrals, match and discretionary Profit Sharing contribution)?? So, if he has to take out, let's say, a $5,000 RMD distribution (the plan isn't that old, so he doesn't have a huge balance), could he simply defer $20,000 into the plan and more than wipe out the taxes that he'd owe on the RMD?
He can still contribute to the plan as long as he takes out the minimum RMD by 12/31.