Skip to Content

Can I still receive contributions to SIMPLE while taking RMDs?

Last Updated September 20, 2011


 I am 71 and participate in my company’s SIMPLE IRA plan. I will begin receiving required minimum distributions this year, but would like to continue to contribute to the SIMPLE IRA plan since I am still working. Is this permitted?


Many small business owners and plan participants who either sponsor or participate in SEP or SIMPLE IRA plans question whether or not contributions can be made to these plans after the owner or participant reaches age70½. The answer is yes. In fact, participants turning 70½ must be allowed to continue participating. This means that participants must continue to share in employer contributions and, in the case of SIMPLE IRA plans, must be allowed to continue to make salary reduction contributions. The contributions to both SEP and SIMPLE IRA plans are made to IRAs; traditional IRAs in the case of SEPs. Note that individuals age 70½ or older are not permitted to make the regular, annual contributions ($5,000 for 2011 or $6,000 if age 50 or older) to traditional IRAs, whether or not the IRA is part of a SEP plan. (See Code §219.)

Keep in mind that individuals are still required to take RMDs from these accounts, since all IRA owners must start taking RMDs once they  have attained age 70½.

  • Pub 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)

  • Pub 590, Individual Retirement Arrangements (IRAs)


*******This Q&A was taken from the IRS's Summer 2008 Employee Plan Newsletter ******Update to make current with limits