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M and M

RMD

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I don't know if this is how you ask a question on this forum.

I really need help with RMD.  I have read all the rules.  But I still have a big question.  Here is my question:

I will be retiring in August (a professor at a university).  I think 2020 is my first RMD year.  Because of Corona, they have waived it.  So, I don't need to take my 2020 RMD.

 

I will continue to teach as an adjunct in fall 2020, and spring 2021.

Do I need to take RMD in 2021?

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48 minutes ago, M and M said:

Do I need to take RMD in 2021?

I'm not at the age  that I have to worry about RMD's yet but that is a good question to search on the IRS website.  https://www.irs.gov/site-index-search?search=RMD&field_pup_historical_1=1&field_pup_historical=1

Here is an article that might/might not help. https://www.schwab.com/resource-center/insights/content/can-you-forgo-taking-rmds-2020

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I assume you know that the age for starting RMDs has changed from 70.5 to 72? This is from a Fidelity site:

Do I have to take my RMD if I'm still working?

Yes, even if you continue working past age 72,* you have to take an RMD from your IRA.

However, you may qualify for an exception from taking RMDs from your current employer-sponsored retirement account, such as a 401(k), 403(b), or small-business account, if:

  • You're still working
  • You do NOT own more than 5% of the business you work for
  • You have an employer-sponsored retirement account with the business you work for

If you meet all the criteria above, you may delay taking an RMD from the account until April 1 of the year after you retire. Keep in mind that this does not apply to IRAs or other accounts you may hold with companies you no longer work for.

https://www.fidelity.com/retirement-ira/required-minimum-distribution-faq

 

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1 hour ago, krow36 said:

I assume you know that the age for starting RMDs has changed from 70.5 to 72? This is from a Fidelity site:

Do I have to take my RMD if I'm still working?

Yes, even if you continue working past age 72,* you have to take an RMD from your IRA.

However, you may qualify for an exception from taking RMDs from your current employer-sponsored retirement account, such as a 401(k), 403(b), or small-business account, if:

  • You're still working
  • You do NOT own more than 5% of the business you work for
  • You have an employer-sponsored retirement account with the business you work for

If you meet all the criteria above, you may delay taking an RMD from the account until April 1 of the year after you retire. Keep in mind that this does not apply to IRAs or other accounts you may hold with companies you no longer work for.

https://www.fidelity.com/retirement-ira/required-minimum-distribution-faq

 

Thank you!

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I haven't heard much about people in the public sector being worried much about RMD's.  What is your concern?  Is it pushing you into a higher tax bracket?  The IRS doesn't require that you spend your RMD.  You can always reinvest it in a taxable account.  In fact if you are still working as an adjunct professor after the age age of 72, you can still invest in a Roth IRA at any age as long as you have earned income.

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