Still working exception
Hi:
I have a client who retired on June 30th, 2018. He was an employee of HSBC and does not own 5% of the company stock. He turned 72 Oct. 2018. Does he need to take a RMD from the 401k plan for 2018 or does the still working exception apply? Not sure if he needed to work the entire year or not. Thank you. fyi, he did take all rmds from his IRAs.
Permalink Submitted by Alan - IRA critic on Mon, 2018-11-26 20:07
Yes, 2018 will become an RMD distribution year for him, but because this is his retirement year, he has until 4/1/2019 to take out the 2018 RMD. However, if he wants to do an IRA rollover of the 401k, then he must complete the 401k RMD first. Therefore, he has options to manage his taxable income for 2018 and 2019 by choosing what portion of his 2018 RMD he wishes to take in 2018 or by determining when he does the IRA rollover.