TIAA PAYOUTS and IRA RMDS
I have a client who, in a divorce, was given two 403b TIAA acocunts, 700k and 300k. I advised her to not take all qualified money due to taxes and the TIAA is restrictive, but her lawyer failed. That said, we initiated to 10 payments over 9 years from the TIAA accounts and they are rolled into her IRA with my firm. She uses some for income and reinvests some for later years in retirement. She has been given a 1099 from my firm for the money withdrawn. My question is, I know that annuitizations do not satisfy RMDS and I have two money types with her now, 403b and IRA. Does TIAA consider this money to have been annutiized and not subject to RMDS? Or do I need to change her distributions to directly taxed from the 403b and some rolled into her IRA and then do a distribution from iRA to satisfy that money type RMD? I guess the answer likely lies with how TIAA is record keeping and if they havent sent client an RMD letter for 2019, then that is probably the answer. thoughts?
THanks in advance as always.
Permalink Submitted by Alan - IRA critic on Thu, 2019-05-02 19:44
TIIA must determine if any of these distributions are RMDs. Under a QDRO, RMDs for the alternate payee begin based on the beginning date of the participant and use the age of the participant. If alternate payee is more than 10 years younger than participant, the joint life table applies. Taking all this into consideration, and using the account balance of the client, TIIA should know if any of these distributions are RMDs. The amount of the RMD is deemed distributed first and is not eligible for rollover. However, if RMDs are not yet due a payout schedule of under 10 years is not ineligible for rollover. In other words, it can be rolled over to an IRA. Of course, to the extent that any payment from the 403b is RMD money, if that payment is rolled over it becomes an excess regular IRA contribution and must be removed with allocated earnings from the IRA. TIIA should be able to confirm the RMD situation for the QDRO 403b, but since the QDRO introduces added complexity the client needs to be asking the most experienced resource available to avoid getting the wrong indication.