I'm 70.5 and still working for my own company. Can I defer starting my required minimum distributions?

By Denise Appleby AAA
A:

The option to defer starting your required minimum distribution (RMD) beyond age 70.5 is available only if the individual is not a 5% owner of the business. Five percent owners must begin RMDs by April 1 of the year following the year they reach age 70.5.
A 5% owner is defined as follows:

  1. If the employer is a corporation, any person who owns more than 5% of the outstanding stock of the corporation, or
  2. If the employer is not a corporation (unincorporated), any person who owns more than 5% of the capital or profits interest in the employer.

If you fall into either of the two categories, you are a 5% owner and should begin your RMD by April 1 of the year following the year you reach age 70.5.

To read more, check out Avoiding RMD Pitfalls.

Question answered by Denise Appleby, CISP, CRC, CRPS, CRSP, APA

RELATED FAQS

  1. What are the best ways to pay less income tax?

    Learn about reducing your income tax burden by contributing to an employer-sponsored retirement plan or IRA, and see what ...
  2. Is there any way to opt out of paying Social Security?

    Understand more about the purpose of the Social Security system and learn which groups of taxpayers are automatically exempt ...
  3. Are part-time employees eligible for fringe benefits?

    Learn how offering fringe benefits allows employers to entice new talent to join their teams, although part-time workers ...
  4. Who is exempt from paying Social Security taxes?

    Learn about the groups of people who qualify for exemption from Social Security taxes, and explore the process of applying ...
RELATED TERMS
  1. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  2. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  3. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
  4. Peri-Retirement

    A term for the period of time leading up to actual retirement. ...
  5. MyRA

    A new tax-advantaged retirement account that President Barack ...
  6. Provident Fund

    A compulsory, government-managed retirement savings scheme used ...

You May Also Like

Related Articles
  1. Professionals

    Why Retirement Advice Is Better But ...

  2. Professionals

    Coming Soon: Private Equity In 401(k) ...

  3. Professionals

    Ways To Cut 401(k) Expenses

  4. Mutual Funds & ETFs

    ETFs Commonly Found In Retirement Accounts

  5. Retirement

    How To Start Saving For Retirement

Trading Center