Rollover From 401(K) Before RMD
I have a client that retired in 2020 and turns 72 in November of 2021 (his fist RMD is for this year). He would like to roll over his 401(k) to an IRA ASAP – his plan is to do QCD’s for $100k a year.
Can he roll the balance this year before taking his first (2021) RMD out of the 401(k)?
If he can not, could he if we deferred until 4/1/2022 for the first one?
Permalink Submitted by David Mertz on Thu, 2021-04-08 20:33
The 401(k) RMD must be satisfied before rolling over any other amounts from the 401(k) to the IRA. The RMD from the 401(k) will not be a QCD, but it may be deductible as an ordinary charitable contribution if given to a charity.
The first amounts distributed from the 401(k) in 2021 or later are RMD until the RMD is satisfied. Deferring the 2021 RMD until early 2022 will make things worse because both the 2021 RMD and the 2022 RMD will need to be satisfied from the 401(k) in 2022 before rolling over the remainder.