Inherited 457 Plan
Mrs. Client died in 2014 at age 67 with a pre-tax 457 plan at her municipal employer. Her spouse (Mr. Client) was the 100% primary beneficiary (age 68 at the time). The spouse did directly rollover the 457 to his own IRA. All RMD’s have been properly taken through 2017.
Mr. Client (now age 72 by year-end 2018) is retiring this year and wishes to rollover his employer’s profit sharing plan to this same IRA so that he has one IRA to keep track of for his own RMD purposes. I understand that the employer will likely require his 2018 RMD to be withheld from his profit sharing prior to rollover.
The question is….since Mr. Client inherited the IRA as a spouse and rolled the IRA to his own IRA, is it accurate that he will simply proceed with taking RMD’s on the combined IRA assets based on his current age using the Uniform Lifetime Table?
Are their any other issues with combining these assets into one IRA?
Thank you.
Permalink Submitted by Alan - IRA critic on Tue, 2018-02-20 23:40
No issues with respect to RMDs. The only issue would be possible creditor protection issues in a few states like CA, where rollover IRAs should be kept separate from IRAs that received regular contributions. If his current rollover IRA is strictly a rollover IRA, then no reason not to add an additional employer plan rollover to that same account. The creditor protection issue is not a factor in most states.