From 24/7 Wall St. · Jake FitzGerald · · 1m 20s
IRS Lets 73-Year-Olds Skip RMDs on Current 401(k) but Not IRA
73-year-olds can skip retirement withdrawals from current employer's 401(k) but not IRA after rolling over old 401(k) into IRA
In brief
73-year-olds can skip retirement withdrawals from current employer's 401(k) but not IRA after rolling over old 401(k) into IRA Current employer's 401(k) avoids mandatory withdrawals until retirement while IRA must start payouts at age 73 Originally reported by 24/7 Wall St..
Quick answers
- Still Working at 73?
- The IRS lets you skip required minimum distributions on your current employer's 401(k) if you're still employed.
- What is the key takeaway from IRS Lets 73-Year-Olds Skip RMDs on Current 401(k) but Not IRA?
- Current employer's 401(k) avoids mandatory withdrawals until retirement while IRA must start payouts at age 73
Still Working at 73?
The IRS lets you skip required minimum distributions on your current employer's 401(k) if you're still employed.
The Still-Working Exception
This rule applies only to the qualified plan of your current employer, not IRAs or previous 401(k)s.
How It Works
If you're employed by the company on December 31 of the distribution year, you can defer RMDs until April 1 after retirement.
The 5% Owner Trap
If you own more than 5% of the business, the exception doesn't apply, even if you're still working.
Why IRA Gets No Reprieve
IRAs follow different rules and the IRS never extended the still-working exception to them.
Old 401(k) Still Exposed
Previous employer's 401(k) doesn't qualify for the exception and must start RMDs at age 73.
Rollover Considerations
Consolidating old 401(k) into current employer's plan may help avoid RMDs but requires checking plan rules.
Key Questions Before Rollover
Check if current 401(k) accepts rollovers, compare fees, and confirm 5% ownership status before moving funds.
The one thing
Current employer's 401(k) avoids mandatory withdrawals until retirement while IRA must start payouts at age 73
