Exceptions to the 70½ Rule

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If you work for a company and do not own at least 5% of the company, you don’t need to take distributions until April 1 of the year after you retire, regardless of your age. You can even be working part time. This exception applies only to the plan of the company for which you currently work. It does not apply to your IRA or to money you have left in plans of ex-employers.

If you have a 403b plan, you may delay distributions of contributions you made prior to 1987 until you reach age 75. You will need to withdraw post-1986 contributions based on the normal age 70½ rule.

Note that you can be make contributions to a retirement plan while you may be distributing from others. You can make contributions to a Roth IRA (if you have earned income) past age 70½, or you can make contributions to your employers 401(k) if working or your own Keogh plan if operating a business.

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