RMD questions for a friend

A friend of mine will be reaching the age of 70 1/2 in a few days (end of March, 2015). He is still working full time, but he is also collecting Social Security. His present employer used to have a SIMPLE IRA Plan in which he was a participant. His employer later changed its retirement plan offerings to an employer-paid SEP IRA Plan and a 403(b) "TDA" Plan. My friend was in the SIMPLE IRA Plan and now is still in the SEP IRA Plan and

403(b) "TDA" Plan.

Also, he was enrolled in some type of defined contribution plan with a previous employer that he left about 10 years ago.

He has no ROTH plans.

The questions are:

1) Is he required to begin taking RMD (Required Minimum Distribution) amounts from ALL of his present employer plans (including the past SIMPLE IRA and the present SEP IRA and 403(b) "TDA" Plan?

2) Is he required to begin taking RMD (Required Minimum Distribution) amounts from his previous employer's retirement plan?

3) For each of these, does he have a choice of directing the various Plans to issue the RMD's payments to him as monthly payments vs. a single annual payment to him?

4) He does not want to postpone taking the initial RMD's until April 1,

2016. Instead wants to take the initial RMD's this year (during 2015). Does he have until 12/31/2015 to take the initial RMD or does he have to begin taking the RMD's before he reaches 70 1/2 at the end of March, 2015?

Thanks.

Reply to
Jake29
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No. As long as he is employed by that employer, he does not have to take mandatory distributions from any of that employer's qualified plans.

Yes.

Never have seen a plan that did not allow for constant monthly payments. However, I believe that the ultimate decision rests with the plan document section on distributions.

He has until midnight 12/31 in the year he turns age 70 1/2 to take the RMD for it to be included in that tax year's income.

Reply to
Alan

Thanks Alan.

My friend is definitely still working for his current employer even though he also started taking Social Security retirement benefits back when he reached the age of 66 1/2.

The custodian(?) of his current employer's plans (Mutual of America) told him a few days ago that he is required to begin taking RMD withdrawals from his current employer's plans now.

After reading what you wrote, I did another Google search and the results confirm the same information -- that my friend is not required to take any RMD withdrawals from his current employer's plans while still working for his current employer (For example,

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) .

I will let my friend know that he should contact his current employer's plan custodian again and get this issue cleared up with them.

Thanks again.

Reply to
Jake29

ISTM a subtlety is being missed here. SEPs and SIMPLEs are considered like IRAs, not like 401k or 403b

See

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Reply to
Retired

Reply to
Alan

Ahah, got it. Thanks "Retired" and "Alan" for clearing that up. I'll let my friend know that he does need to do the RMD's from those IRA plans even though he is still employed where he participates in those plans.

P.S. "Retired", what does ISTM stand for? I don't know that one.

Reply to
Jake29

ISTM = It Seems To Me

This site may help in future

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Reply to
Retired

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