Rollover IRA to 457 plan to avoid rmd
If someone is turning 70 1/2 this year and still working, can they rollover their IRA account to their 457 plan to avoid rmd on the IRA? Since they are already in their 70 1/2 year do they still need to take rmd for this year, but can rollover the balance if done by 12/31?
Permalink Submitted by Alan Spross on Wed, 2012-08-15 19:27
They can roll the IRA into a GOVT 457 plan, but the IRA RMD must be distributed first. This will only eliminate future IRA RMDs, not the current year. If the rollover is done prior to the year taxpayer reaches 70.5, then there is no current year RMD to distribute first.
Note:
1) 457 plan must accept IRA rollovers
2) Only pre tax IRA balances can be rolled over. After tax amounts (Form 8606 balance) must stay in the IRA and will generate future RMDs.