RMD from 401k after retirement
My client turned 70.5 in January of 2019 and retired April 26 2019. I believe his RMD is due April 2020. Is that correct? At that time, he needs to take a 2019 distribution and then he will need to take a 2020 distribution by the end of 2020 — Is that correct? Thank you.
Permalink Submitted by Alan - IRA critic on Tue, 2019-05-07 18:08
Yes, that is correct. He would have 2 RMDs in his taxable income for 2020. But if he wants to do a direct rollover to an IRA, the RMD for the rollover year (plus the prior year RMD if not distributed) will have to be distributed at the time of the rollover. He could defer part of his 2019 RMD, it does not have to be all or nothing. Finally, if he has any highly appreciated employer shares in the 401k, he should at least explore the option to utilize NUA for those shares.