First RMD
Alan and all:
70th Birthday–August 2015
70.5 date would be Feb.2016 Therefor first RMD is 4/2017? 2nd yr. RMD 12/2017. Correct?
If my RMD is approximately 20k for the first year(2017). Can I take 10k in Dec(2016) and 10k in March(2017). Then take the 2017 distribution in Dec 2017?
IRAcritic–thanks in advance
jerry
Permalink Submitted by Alan - IRA critic on Tue, 2014-10-14 21:23
Jerry, first RMD distribution year is 2016. If your RMD is 20k (divisor 26.5) you can split that between 2016 and 2017 (by 4/1/2017) in any proportion you want. Scenarios exist under which your lowest combined taxes for both years will result from taking out a certain portion of 2016 in 2016. SS taxation is usually the key, but not the only factor. One example of this might be your 10k/10k equal split as you proposed. My ideal split turned out to be 65% of my first year RMD in Dec of that year and deferred 35% to March of the following year. You might also consider doing away with quarterly estimates come 2016, and just have your taxes entirely withheld from the Dec distributions. You are really planning ahead!
Permalink Submitted by george collins on Tue, 2014-10-14 21:42
Alan–thanks and as always, your answers are clear and concise. I have valued your input over the years. I understand my first RMD year is when I am 71(2016).The 20k split was just an example. Like you I will maximize the ratio between the two tax yrs. My issue is the 170K MAGI limit.By planning ahead (with IRAhelp and the Bogleheads) with SS delays, Spousal SS contributions, Roth Conversions, income balancing, etc I am not at the mercy of all the IRS rules and limits.
Permalink Submitted by Gerald Ahern on Wed, 2014-10-22 16:26
My cient turned 70.5 in 2014 and worked until age 70. We just completed a transfer of her assets from the 401k to TD Ameritrade. the prior year’s balance was in the 401k–do we use that to calculate her rmd for 2014? Thanks.
Permalink Submitted by Alan - IRA critic on Wed, 2014-10-22 20:31
The 401k should not have rolled over the 2014 RMD, and most plans do not make that error. If they did, the 2014 401k RMD is deemed satisfied, but becomes an excess IRA contribution that must be removed along with allocated earnings. The IRA RMD for 2014 is based only on the 12/31/2013 IRA balance, and since the required beginning date is 4/1/2015, all or part of the 2014 IRA RMD can be deferred to that date.