RMD Strategy No. 1: Work Waiver
Now that we’ve covered the basic RMD rules, it’s time to look at all the options for minimizing those required distributions.
First, check to see if you have an RMD escape route. Every rule has an exception, and the RMD rules are no different. There are a number of instances where you can reduce RMDs—or avoid them altogether.
If you are still working beyond age 70½ and don’t own 5% or more of the company, you can avoid taking RMDs from your current employer’s 401(k) until you retire. You must still take RMDs from old 401(k)s you own and from your traditional IRAs.
But there’s a workaround for that: If your current employer’s 401(k) allows money to be rolled into the plan, says Kelly Famiglietta, vice president and partner of retirement plan services at financial-services firm Charles Stephen, “you could roll in the other accounts to postpone all RMDs.” And, voila!, you won’t have to take any RMDs until you actually retire.
