Timing of Roth 401K rollover with RMD
Dear Alan et al,
Our client turns 70 in Dec 2017 and turns 70 1/2 in June 2018. She is retired and our plan is to roll her Roth 401(k) into her Roth IRA in the next few weeks so that she won’t have to take a RMD next year.
My understanding is that she can go ahead and roll the full amount over to her Roth IRA because her first 401(k) RMD would be in 2018 based on her 12-31-2017 balance. In other words, the custodian isn’t going to withhold her 1st RMD before she can roll the rest over.
Does this sound correct?
Thanks in advance,
Chris
Permalink Submitted by Alan - IRA critic on Thu, 2017-01-26 22:06
Chris, you are correct. Completing the Roth IRA rollover before the end of this year will result in no RMD being distributed on the Roth money during her life time. Rolling the pre tax plan over to a TIRA at the same time may also be worth considering.