Working past 70.5 with two employers 401K
My husband is 72 and loves to stay busy. He has two part time jobs where he is able to contribute to each company’s 401K plans. He receives their match. One account is much larger than the other from rolling former employer 401K money into it.
He is thinking of quitting the job (with the smaller account). He will keep the other job for awhile.
We know he has to take an RMD for the year in which he quits before April 1 of the year following quitting.
Can he roll the remaining funds in the 401K from the company he quit into the other company’s 401K after taking one RMD?
What would be the best plan to minimize RMDs and/or penalties? We don’t need the money yet.
Permalink Submitted by Alan - IRA critic on Sat, 2015-10-24 03:34
If the surviving 401k will accept rollovers from other plans, he can take the RMD, then roll the balance into the surviving 401k plan and defer additional RMDs longer. He needs to complete this rollover before the RBD year starts or he will have two years of RMDs to take before doing the rollover. This is the only way to defer RMDs longer, Some people also use this strategy with IRA accounts by rolling into the current 401k after completing the current RMD.
Permalink Submitted by Mary Bach on Tue, 2015-10-27 11:39
Thank you for the clarification.We have done what you mentioned transferring his IRAs into his 401K. We will try to delay triggering an RMD from the smaller 401K until 2016 since we are doing a Roth conversion for 2015.