If you are still working at the age of 73 and wondering if you need to take the minimum required distributions, you are not alone. A recent question about “Women and money“Podcast threw this issue to light – and Suz Orman He had a lot to say about this.
His name is Janet She wrote with a common anxiety: She has recently reached 76 years old and is told that she is as long as she works full -time, she does not need to start RMDs. She is now thinking about retirement and wants to know what to do after that.
Orman’s answer depends on Janet’s retirement account.
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According to Orman, the rules differ depending on whether your retirement savings are in a plan sponsored by the employer or Individual retirement account.
“If you are working and RMDs of your business owner’s plan, you are 401K, 403 or (savings savings plan), you don’t have to start taking it in 73,” Orman explained. These accounts sponsored by the employer are exempted from RMDS until retirement-as long as you are still operating by the company that sponsors the plan.
But the rule does not apply to Iras.
“However, if you have any iRA, only you, Iras, or anything that might be, this does not apply,” said Orman. “So if you have Sep Ira, IRA is simple, and any of it, you have to take RMDS from the Irish Republican Army even if you are working full time.”
So if Janet has funds in the Irish Republican Army and did not take RMDS for her, she may already be behind her.
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RMD loss does not automatically not lead to a very slope penalty, but you will want to act quickly. Orman suggests taking the last distribution immediately and working with CPA to provide appropriate models with the Tax Authority.
“The Tax Authority may abdicate completely if it can show a reasonable reason,” she said. But timing and documentation is important, so it is recommended to help professionalism.
Another question appeared on the podcast: If you are still working and Take rmdsCan you also contribute to a retirement account?
The answer is yes – if you have got an income, you can still contribute to certain accounts. For example, if you are working for your own account, you can contribute to the Ira Sep even while taking RMDs. In fact, you may be able to contribute to a large amount and get a tax discount.
However, Orman warned that just because you can contribute it does not mean that you should do so. She said, “It may be better to pay taxes from time to time, then invest this money in an individual mediation account,” especially if you expect tax rates in retirement.
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The most important thing is to understand the type of retirement accounts you keep. If your money is in 401 (K) and you are still working for the company you sponsor, you can likely delay RMDs. But if your savings in the Irish Republican Army, the RMD watch will start in 73 – regardless of your employment status.
When you are in doubt, it is better to consult with CPA or Financial Adviser Who can help you move in the rules and avoid expensive errors.
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