Pension Rollover after age 70 1/2
I have a client who will be retiring 12/31/18 and will be rolling over her pensions lump sum to an IRA in 2019. When will she have to take her first RMD? Will she have to take an RMD for ’18 when she turned 70 1/2 even though the funds were still in the pension?
Permalink Submitted by Alan - IRA critic on Wed, 2018-09-26 18:56
A retirement date of 12/31/2018 makes 2018 an RMD distribution year for the pension. Client could take that distribution this year, but if it is deferred that 2018 RMD must be distributed at the earliest of the date of the IRA rollover or 4/1/2019. Then the 2019 RMD must be distributed at the earliest of the IRA rollover date or 12/31/2019. The first IRA RMD on this balance will be in 2020. Now if the retirement date was extended into January, 2019 there would be no 2018 RMD required assuming she is not a 5% owner.