RMDs from in-Service 401k at 70+

Submitted by Roland Chow on Wed, 2017-11-15 18:54

For someone who is over 70 and still working, can they take a portion of the in-service 401k (traditional) and roll it over into an IRA (traditional)?

If yes, can they now proceed to take a distribution against that new IRA to pay for RMDs against another IRA account?

Thank you.



Submitted by Alan - IRA critic on Wed, 2017-11-15 19:11

  • Most 401k plans will allow you an in service distribution at that age, but there a few that may require waiting until retirement or separation. If a rollover is allowed, and the person later retires in that same year, an RMD is triggered and the RMD amount included in the rollover becomes an excess contribution to the IRA that must be removed. But the 401k RMD would be satisfied by the rollover.
  • Once the funds are in the IRA, they can be used under the IRA RMD aggregation rules to satisfy the RMD for any other owned IRA accounts. But the IRA RMD for the actual amount rolled over will not increase the IRA RMD on that amount until the following calendar year.
  • Short answer to your questions is therefore “usually yes” and “yes”.

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