Required Minimum Distribution for non onwer still working?

[Guest Michael Anderson]

Does an employee participating in a 401(k) Plan who is still working, but not an owner, have to take the 70 1/2 Required Minimum Distribution? Thanks!

[K-t-F]

Generally, Required Minimum Distributions must be started by April 1st of the year following the calendar year in which the account holder attains age 70-1/2. If the account is through the account holder's current employer and the account holder does not own 5% or more of the business, the account holder can wait until April 1st of the year following the calendar year he retires, if later. This is called the account holder's Required Beginning Date (RBD). Normally, each year's RMD must be completed by December 31st. Only in the first year can an account holder wait until the following April 1st. (Consider this to be a little break, in case you forget to start taking your distributions in the first year.)

Do I have it right?

[david rigby]

It would be surprising if this question is not already addressed in the plan document.

[Tom Poje]

true, however, remember a plan is not required to be amended for the new required begining date. so, it is possible the document will say age 70 1/2 no ifs and or buts

[david rigby]

Correct, in which case, the plan already answers the question.

[rcline46]

As pax said, the answer is in the document. Even if it were amended it could call for 70 1/2 for certain non-owners. If not amended, definitely need to do distributions starting at 70 1/2.

[Guest Michael Anderson]

Thanks for the information. Can you tell me where we might find this information in the document?

[Alf]

Look at the RBD definition in the plan. Employers are allowed to delay distributions to non-owners until they retire, but the change is technically optional. Also, the effective date is optional. If it is a prototype plan, I believe that the amendment may not have been made in some cases, but it probably has been. Be sure to check all amendments because this change may have been done as a supplement or amendment and may not be in the main document itself.

[Harwood]

Do a word search of the document for all occurrences of "401(a)(9)"

[david rigby]

If you don't know whether it was amended, do another search, of anyone else who might know. (Very easy to have an executed plan amendment, but a copy was not placed in your possession?)

[Guest Michael Anderson]

I found it - Thanks!