RMD from 401k
Person was 70 1/2 in 2018. Was still working. Left the firm Jan , 2019 and went to another firm. Funds are still in 401k at old firm. She has until 12/31/2019 to make RMD based on 12/31/2018 balance, correct? Is that her only requirement? Then she could do an IRA rollover and start RMDs on a regular basis in 2020?
Permalink Submitted by Alan - IRA critic on Wed, 2019-03-20 17:09
There is no 2018 RMD unless 5% owner, 2019 RMD could be deferred to as late as 4/1/2020. However, any RMDs that will be due for the year or prior year at the time of an IRA rollover must be distributed at the time of the IRA rollover.
Permalink Submitted by Stephen Hodson on Thu, 2019-03-21 09:45
Not a 5% owner. Should she take her 2019 RMD then do rollover or can she do rollover and take distribution by 12/31/2019?
Permalink Submitted by Alan - IRA critic on Thu, 2019-03-21 15:26
The RMD must be distributed prior to or simultaneously with the rollover because the rollover is treated as a distribution and the first distribution in an RMD distribution year is deemed to include the RMD up to the amount of that distribution. If the RMD is rolled over in error, it creates an excess IRA contribution.