Ask the Expert: FYI about taking RMDs
In most cases, you aren't required to take distributions from your current employer's retirement plan, regardless of your age. Credit: iStock
There's no legal age limit for making contributions to your current employer's retirement plan, whether it's a 401(k), a 403(b) or a 457 plan.
Assuming you don't own 5 percent or more of the company that employs you, you're not legally required to take RMDs from its retirement plan until April 1 of the calendar year after you stop working there. As noted in my earlier column, this exemption does not apply to your IRAs or to any retirement account balance that you may have in a former employer's plan. You must start taking RMDs from those accounts after you turn 701/2, regardless of whether you're still working.
In fact, if you still have accounts in the retirement plans of former employers, those plans may require you to withdraw your entire balance after you turn 701/2. The law says that if your account balance in an employer's plan is $5,000 or more, you can leave your money there even if you no longer work there. But that law only applies until normal retirement age. At that point, a former employer's plan can require you to withdraw your money. This doesn't mean you have to take a taxable withdrawal from the plan. You can move your account balance into an IRA and take RMDs from the IRA.
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