RMD Question
If an individual chooses to delay his/her first RMD until after the year in which he/she turns 70 1/2 (i.e. double up on RMDs in Year 2 vs. taking an RMD in Year 1 and an RMD in Year 2), is it possible to do the following:
– Take one-half of the Year 1 RMD in Year 1.
– Take the remaining one-half of the Year 1 RMD plus the Year 2 RMD in Year 2.
Would this be kosher under the law? In other words, would the RMD for Years 1 and 2 be fully satisfied using this method?
Your thoughts would be appreciated.
Thanks,
Matt Camrud, CFP
Permalink Submitted by [email protected] on Thu, 2007-09-13 21:37
Yes. it’s kosher.
Any distribution taken in the first RMD distribution year is credited against the RMD due by the RBD. Therefore, if half is taken in Year 1 (first distribution year), then only the other half remains due prior to the following 4/1. It must be taken prior to 4/1.
Then, the second distribution year RMD must be taken by 12/31 of that year, and if so all RMD requirements are met.
This strategy may be useful in allocating taxable income between the two years.
Permalink Submitted by [email protected] on Thu, 2007-09-13 21:58
Thanks for your timely response. Makes good sense to me.