401k rmd
I have a client who is 70 1/2 this year and is still working and making contributions into his 401k . He we would like to do an in-service withdrawal this year to transfer into his IRA with a bank. Would the direct rollover to an IRA trigger a RMD requirement.
Permalink Submitted by Alan - IRA critic on Wed, 2018-09-19 18:57
No, as long as client is still working as of year end and is not a greater than 5% owner of his employer. The first IRA RMD on the balance rolled over will be for 2019 using the 12/31/2018 IRA balance. Therefore, starting next year client will be subject to RMDs on the rollover amount, whereas there would be no RMDs if the funds remainined in the 401k and client kept working.