RMD on new retirement account
A 73 year old begins contributions to a Retirement Plan at the beginning of 2011. He retires in June of 2011. So he has funds in his tax deferred account and normally he would have a Required Minimum Distribution based on the balance in the account on 12/31/2010. But the account did not exist on that date. Does this mean that there is NO RMD for 2011?
Permalink Submitted by Alan Spross on Wed, 2011-06-22 19:24
That’s right. No 2011 RMD since there was no 12/31/2010 balance.
His first RMD would be for 2012 using the 12/31/2011 balance. Or more likely, he will have rolled over the plan to an IRA before the end of 2011, and will have a 2012 IRA RMD instead. The plan should not hold back any RMD if he rolls it over this year, but if he waits until 2012, the plan will have to hold the RMD out of any IRA rollover.