IRA & Lump Sum Pension into 401k to defer RMD’s
My client is 70.5 and still working and contributing to current employer’s 401k and is not an owner of the company. He will be receiving a Lump Sum from a prior employer pension and has an IRA. Can he roll both the pension and IRA into the current 401k (after taking his current RMD from each) and avoid future RMD’s? He plans to work until 75.
Thanks
Permalink Submitted by Alan - IRA critic on Thu, 2018-05-24 17:25
Yes, that could be done, but obviously client should first verify that the current plan follows the IRS guidelines as to the required beginning date because a plan is allowed to require all employees to start RMDs at 70.5. This is fairly rare, but there are such plans. Also be sure that the 5% ownership provision is not triggered due to family attribution rules (for example, if client’s son is a 5% owner).