Delaying 403b RMD
A client is turning 70.5 this year. They have several 403b plans including one from current employer. We were trying to rollover the former employers 403 into the current one to attempt to avoid taking a RMD. We were told that it had to be done last year. Is this correct? I can not seem to find anything definitive on the IRS site (surprise!)
I was told that client would have to take RMD prior to rolling over to existing plan. Next year those funds would not be subject to RMD.
Any assistance would be greatly appreciated as the client does not need the funds since she is currently employed and plans on working until at least 75.
Thanks!
Permalink Submitted by Alan - IRA critic on Fri, 2018-03-02 17:51
Client needed to complete the rollover prior to this year to avoid the RMD for this year. Since a direct rollover is treated as a distribution and rollover, it triggers an RMD however RMDs in future years are avoided until the client retires from the receiving plan sponsor. That said, if the funds can be moved by direct transfer between the plans, these are not reportable distributions and therefore a 2018 RMD can be avoided. Client should ask current plan if they will accept a direct transfer from a 403b of a prior employer.