401(a) Plan
Are there different RMD rules for 401(a) plan participants? This is a plan I am no longer active in but I would like to rollover to an IRA when I retire. The retirement counselor today said I didn’t have to take the RMD in the year I attained 70.5. All of the funds could be rolled over. After the meeting I called her and asked her to put that in writing. For those following my the Q&A here I don’t have to retire in 2015 (to escape the RMD) but can retire in 2016 as I originally planned (maybe).
Permalink Submitted by Alan - IRA critic on Wed, 2013-02-27 01:24
As long as you are not a 5% owner, you don’t have to take an RMD if you are still working (a few plans require everyone to take RMDs at 70.5). Therefore, if you are still working and the plan allows you to take distributions, you could roll the plan over to an IRA without an RMD. In the year you reach 70.5 or later however, if you retire before the end of the year, the RMD must not be included in the rollover. Sounds like the counselor was incorrect or did not understand you were referring to a year where you were 70.5 AND retired.