Why You Should Roll Over Your Retirement Funds to an IRA
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Why You Should Roll Over Your Retirement Funds to an IRA

By Sarah Brenner, JD
Director of Retirement Education

By Sarah Brenner, JD

If you are like most American workers, you will change jobs many times during your lifetime. With a job change, you will have a decision to make. What should you do with the funds in your retirement plan? One option is to do a rollover to an IRA. An IRA rollover offers some big benefits.


Q: I am involved with a traditional non-spouse inherited IRA that was passed from my mother to myself and two siblings in 2022. My mother was 84 when she passed and was taking RMDs.

I understand the new legislation passed under the SECURE Act requires any such traditional inherited IRA requires full distribution by the end of the 10-year period following her death. I fully understand the law change.

My question revolves around potential yearly RMDs for each of us starting in 2023. Are RMDs for inherited IRAs now required by IRS regulation starting in 2023? If so, under what table is the RMD calculated (by applying the factor to the 12/31/2022 balance)?

The Treasury issued PROPOSED regulations in 2022 indicating that RMDs for inherited IRAs would be required. My understanding is the proposed regulations were met with significant protest by tax professionals and practitioners. However, my understanding is that PROPOSED regulations are not binding until finalized by the Treasury Dept. I have not seen any document or commentary indicating that the applicable regulations have ever been finalized. Are RMDs required for inherited IRAs in 2023 until the Treasury Dept. finalizes the regulations?


Q: I inherited an IRA from my brother back in 2019. I have been taking required distributions from it each year. Can I do a qualified charitable distribution from this inherited IRA this year to satisfy the required distribution requirements from this IRA?


Q: If a 76-year-old is working full time and has a SIMPLE IRA and she does not own any of the company that sponsors the SIMPLE IRA, does she still have to take a RMD (required minimum distribution) from her SIMPLE IRA?


Q: I have a large amount of stock from a previous employer in my 401(k). I had been reinvesting the dividends for the last 23 years since I left the company. I no longer want to reinvest the dividend to buy additional shares. Most of the stock has appreciated considerably since I bought it.

I am still working for another year and in a fairly high tax bracket. After I retire, I plan to take the stock out of the 401(k) to use the net unrealized appreciation strategy (NUA) to get favorable tax treatment on the appreciate stock. The 401(k) has two options for dividends from the company stock while it is still in the 401(k) plan: I can either reinvest the dividend in more company stock, or have them send me a quarterly check for the dividend amount. Will I jeopardize the favorable tax treatment if I have them send me a quarterly dividend check in years before I proceed with the NUA distribution?


Q: I am 73 and a retired financial planner. I would like to do a partial withdrawal from my 403(b) and do a 60-day rollover back into the same 403(b). Can I do this, or do I have to do the 60-day rollover to a different 403(b) or IRA?


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