RMD while still contributing

[Jesse]

Client was told by Financial Advisor that as long as he was working and contributing to the Employers deferred comp plan they do not need to take the required minimum distribution from any IRA accounts. In my hasty research I'm not finding anything to support this.

Looking for confirmation or misinformed?

[Bees Knees]

The financial advisor is mixing up the rules for traditional IRAs with qualified employer plans. There is a difference.

TTB, page 13-23 explains the rules for each:

Traditional IRAs. A participant in a traditional IRA must begin
receiving distributions from the IRA by April 1 of the year following
the year the participant turns age 70½. No deduction is
allowed for contributions in the year the participant turns age
70½ even if the participant continues to earn compensation. [IRC
§219(d)(1)]

Qualified plans. For a participant in a qualified
pension plan, RMD begins by April 1 of the
year following the later of the year:
1) The employee turns age 70½, or
2) The year the employee retires.
However, even though the tax rules may permit employees to
wait until retirement, some employer plans may require participants
to begin to receive distributions by April 1 of the year the
employee turns age 70½.

5% owners. If an employee owns more than 5% of the stock, capital,
or profits interest in a company, RMD must begin by April 1 of
the year following the year the employee turns age 70½.

Roth IRAs. The RMD rules do not apply. Distributions are required
after the death of the participant.

SEP-IRAs and SIMPLE IRAs. Are treated as traditional IRAs
for purposes of the RMD rules, except that contributions can still
be made to the plan after age 70½ if the participant has earned
income (See Contributions After Age 70½, page 13-25). The RMD for
each can be taken from any one or more of the IRAs.

[Jesse]

Thank you

for the informative quick response!