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Asked 11/20/2009
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I'm 701/2 want to take my 401k and still work for the same employer part time,iv'e told i can't,will i have to pay the50%pently if i don't take,i don' I'm 70 1/2 wanr to take my 401k and still work part time for the same employer,they are telling me i have to retire from my job to collect my 401k.Will i have to pay the penalty of 50% because i did not take it at 701/2. Thank you |
Answer 1/1 - Submitted 11/21/2009
According to the IRS,
"The required beginning date is April 1 of the first year after the later of the following years:
--Calendar year in which you reach age 70½.
--Calendar year in which you retire.
However, a plan may require you to begin receiving distributions by April 1 of the year after you reach age 70½, even if you have not retired."
So, you have to check with the HR people, or whoever your company has designated, to be certain of what the plan itself says. Unless it specifies the age you have to start drawing (be it 70 1/2 or 75 like some I've seen), then you are not in trouble as long as you are still working for that company.
There is no penalty as long as you draw based on your plan's requirements. (This is different from an IRA, which is age-based.)
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