ROTH CONVERSION
I am 83 years old so take my RMD’s each year. I have IRAs in different banks . Also I have an IRA in a stock account. I plan to convert part of my stock account to a Roth. Do I have to take all of my RMD’s equivalants out of my CDs before I can convert part of my stock account IRA into a Roth?
Permalink Submitted by Alan Spross on Tue, 2011-09-20 19:25
Yes, you must take your full RMD for the year before you do the conversion. But those RMDs can be satisfied in any combination you wish over all the different IRAs. Since you are only planning to convert part of the stock IRA to a Roth, it would be easier to take your total RMD from the stock account first, and then convert the amount you want after the RMD is complete. That way you do not have to touch the CD IRAs. Some banks waive the early withdrawal penalty for RMD amounts and some don’t. If you take the full RMD from the stock account you won’t have to deal with the banks at all.