Roth 401k - 5% Ownership Rule
According to the IRS, if you have a Roth 401K retirement account, you must take required minimum distributions no later than April 1 of the year after the calendar year in which you reach age 70 1/2, unless still working and not a 5% owner.
1. What is the definition of still working? 20 hours per week? 40 hours per week? 5 hours per week? 1 hour per week?
2. What if you changed ownership of the LLC and listed a trust as a 96% owner (and you were listed as the beneficiary of the trust) and thus you only would own 4% of the business (LLC)? Would this work?
I really like the tax advantages of a self-directed roth 401K, but I do not like how I have to take required minimum distributions at age 70 1/2. I'm trying to figure out a clever way around that annoying factor.
Any advice or words of wisdom would be much appreciated!