IRAs also require distributions beginning at age 70 1/2. Does that also apply to qualified plans?
Yes, the same rule applies. In a defined contribution plan, the minimum distribution is calculated the same way as in an IRA. In a defined benefit plan, you must withdraw your accrued annual benefit. By when do I have to start such a plan to get a deduction for the year? If you are a calendar year tax-payer, you must have signed an adoption agreement by December 31. If you pay taxes on any other basis, you have until the last day of such year. Don’t I have until April 15? No. If you adopt a SEP (Simplifed Employee Pension), then you have until April 15, if you are a calendar year tax-payer. But for any other qualified plan, the adoption agreement must be signed by the last day of the year. No grace period. I already have a SEP. Can I add a qualified plan as well? Usually not, for two different reasons. (1) If you adopted the SEP through the IRS Model SEP document (Form 5305), then NO, you can’t. But if you adopted it any other way, YES, you can. (2) When you have two retirement plans,
