Is an RMD required from a 401(k) if one is over 70 1/2 and still working full time and contributing to the 401(k) each week? If so, can it be done online from the 401(k) site?


No. Depositing or not, if you are still working, RMDs are not required. The following citation is from the IRS article 401(k) Resource Guide - Plan Participants - General Distribution Rules

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.

I added the last line after seeing the comment below. Thus the answer morphs to "The post 70-1/2 401(k) RMD while working, is not required by the IRS, but might be, by the plan itself. Therefore, one should check with their plan administration, or read the fine print." Keep in mind, the company running the plan makes money on volume, the 70-1/2 year old on average, would have a far higher balance than the young worker, and it's not in the company's benefit to force these withdrawals.

I am retired, and yes, the plan lets us handle the transactions on line.

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  • 1
    Are you sure of that? Everything I've read (admittedly not extensively) says the 70 1/2 deadline is pretty much set in stone. Could you give a reference? – jamesqf Dec 30 '17 at 4:49
  • 2
    But that's followed by "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." I suppose it's also possible that the rules are somewhat different for 401(k) and IRA RMDs. Since I'm self-employed, I wound up rolling my 401(k) into an IRA, so those are the rules I was looking at. – jamesqf Dec 31 '17 at 4:39
  • One more edit. Better? Yes, IRAs have different rules. RMDs are required, by law. 401(k)s also have a 20% mandatory withholding. With no other income, most people have an average tax rate far lower than this. In the withdrawal phase, it's better for most to first transfer to an IRA account. – JTP - Apologise to Monica Dec 31 '17 at 12:31
  • Better, though still confusing - though the confusion is not your fault. It would have been just too simple to use the same set of rules for both IRA & 401k, there might even be unemployed lawyers :-( – jamesqf Dec 31 '17 at 19:49
  • I could not agree more. Different rules between the 401K and the IRA and a multitude of other retirement accounts, makes no sense. In our case, when we retired my wife was over 55 but under 59 1/2, So 401(k) withdrawals had no penalty but the IRA would. Just add that to the list. – JTP - Apologise to Monica Dec 31 '17 at 20:07

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