RMD Rules for Older Workers

Still working beyond age 70? Some people can avoid taking required minimum distributions from their retirement accounts; others can’t. Here’s the distinction.

I am self-employed and plan to work for many years at age 70. Do I have to take required minimum distributions from my solo 401(k) while I’m still working, or can I delay taking withdrawals until after I retire?

Even though you can usually delay taking required minimum distributions from an employer’s 401(k) while you’re still working at that job, the rules are different for business owners: You can’t delay taking the RMDs if you own 5% or more of a business. You’ll need to start taking RMDs after age 70½.

If you had a Simplified Employee Pension (SEP) or SIMPLE IRA instead, you’d still have to take RMDs at 70½. Those accounts follow the rules for traditional IRAs, which are subject to required minimum distributions after age 70½, whether or not you are still working.

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For more information about the RMD start dates, see this IRS Fact Sheet (opens in new tab). You can also get more information from our special report on required minimum distributions.

Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.