July 2011

Ask a trust officer:

Exception on required distributions

DEAR TRUST OFFICER:

When I reached 65, I decided to cut my hours instead of retiring. Now I’m 71 and still going strong. Do I have to start taking 401(k) distributions? I’d rather not. —DELAYED FULL RETIREMENT

DEAR DELAYED:

Required minimum distributions from your 401(k) plan must begin by April 1 of the year after the later of reaching age 70 ½ or retirement. So it sounds like you can skip the minimum distributions for now. However, if you are a 5% owner of your employer, or ever have been a 5% owner, you don’t have the option to wait. Once minimum distributions have begun, they can’t be stopped, even if you decide to “unretire.”

Do you have a question concerning wealth management or trusts? Send your inquiry to tormey@pgbank.com.

(July 2011)

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