Topic Archive: Required Minimum Distributions

DWC News Update | The CARES Act: Federal Coronavirus Relief

DWC | 03/30/20

On Friday afternoon, March 27th, Congress passed, and the President signed, the Coronavirus Aid, Relief, and Economic Security (CARES) Act - sweeping legislation intended to provide much-needed relief due to the coronavirus public health emergency.  At nearly 1,000 pages in total, the legislation covers a lot of ground in a many areas.  With respect to company-sponsored retirement plans, the relief focuses on four areas:

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Do We Need to Continue Paying RMDs for a Deceased Participant?

DWC | 02/18/20

Facts

The CEO (and 5% owner) of our company passed away earlier this year at the age of 73.  He started taking his required minimum distributions right on time after reaching age 70 ½.  At the time of his passing, he was not married and had no children.  He also had not designated a beneficiary under the plan.

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DWC News Update: House Passes the SECURE Act

DWC | 05/24/19

-A breakdown of breaking news from DWC's Managing Partner, Keith Clark

If you are reading the mainstream press, the SECURE Act being signed into law is just around the corner.  While the overwhelming bi-partisan approval in the House of Representatives is an important (and increasingly rare) development, there are still a number of steps that must occur before it becomes law:

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Are RMDs Required for a Retiree Turned Independent Contractor?

DWC | 11/27/18

This QOTW has been updated to reflect changes made by the SECURE Act, which was signed into law on December 20, 2019.

Participants who were born on or before July 1, 1949, are required to start taking their RMDs in the year they turn 70 ½.  Those born after that date are subject to RMDs on reaching age 72.

Facts

We have an employee who attained age 70 ½ earlier in 2018 and will retire by the end of 2018. However, she has agreed to enter into a contract to provide services to our firm and will be reclassified as an independent contractor on December 1, 2018.

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Can We Suspend RMDs for a Rehire?

DWC | 11/13/18

This QOTW has been updated to reflect changes made by the SECURE Act, which was signed into law on December 20, 2019.

Participants who were born on or before July 1, 1949, are required to start taking their RMDs in the year they turn 70 ½.  Those born after that date are subject to RMDs on reaching age 72.

Facts

We have a non-owner participant in our 401(k) plan who is age 74 and retired in 2014.  That means that he has already been taking required minimum distributions for the last few years. We just recently rehired him in October 2018. Now that he is re-employed he has inquired as to whether he can suspend his RMDs this year.

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Can a Participant Get a Jump on RMDs & Start Taking Them a Few Months Early?

DWC | 11/6/18

This QOTW has been updated to reflect changes made by the SECURE Act, which was signed into law on December 20, 2019.

Participants who were born on or before July 1, 1949, are required to start taking their RMDs in the year they turn 70 ½.  Those born after that date are subject to RMDs on reaching age 72.

Facts

One of the non-owner participants in our 401(k) plan will be turning 72 in April of 2021.  The participant knows her first RMD is due no later than April 1, 2022, but she has asked whether she has to wait that long to actually withdraw the money. 

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Can a Charitable Organization be Named as a Plan Beneficiary?

DWC | 09/25/18

Facts

Our company sponsors both a 401(k) plan and a cash balance plan.  One of our employees is a strong supporter of a local charity.  She does not have a spouse or children, so she would like to name the charity she supports as her beneficiary for both of our retirement plans.

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Q3 Pension Pontifications

DWC | 09/13/18

All of us here at DWC thrive on the really geeky stuff, and some of the best discussions start with Adam and Keith’s pontifications about how different topics impact our clients and our industry.  We decided to bring the best of those conversations to you, still with a touch of geekiness but also distilled into easily digested, bite-sized pieces. Anyone can summarize a summary and call it commentary or analysis. But as always, our commentary is based on reading the actual rules, regulations, executive orders, and advisory opinions.  - As originally published in our Q3 401(k) Q&A Update newsletter

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How Should a Plan Sponsor Handle Required Minimum Distributions For Missing or Nonresponsive Participants?

DWC | 01/16/18

Facts

One of our employees retired on July 31, 2017 at age 73.  During her tenure with the company she was an active participant in the 401(k) plan, accumulating a balance while having never taken a distribution to date.  Now that she’s terminated, I understand she’s subject to required minimum distributions, with the first one due by April 1, 2018.

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Can a Company Owner Withdraw More than the Required Minimum Distribution After Age 70 1/2?

DWC | 09/5/17

This QOTW has been updated to reflect changes made by the SECURE Act, which was signed into law on December 20, 2019.

Participants who were born on or before July 1, 1949, are required to start taking their RMDs in the year they turn 70 ½. Those born after that date are subject to RMDs on reaching age 72.

Facts

One of the owners of our company is 75 years old. She remains actively employed by the company and does not show any signs of cutting back or quitting any time soon. She has accumulated a significant account balance in the 401(k) plan and has been taking her required minimum distributions (RMDs) each year since she reached the RMD age requirement.

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The views expressed in this blog are those of the authors and do not necessarily represent the views of any other person or organization. All content is provided for informational purposes only and is not intended to be tax or legal advice.