Still Working Exception Timing

Hello-

Client age 74 was delaying RMD from 401k due to still working exception. He lost his job in February and found a new job in June.

My understanding is if the client wants to continue taking advantage of the still working exception (assuming the new company 401k allows this) they have two options:
1. Take the 2022 RMD now and then roll to the new 401k prior to the end of the year. If he does it this year only has to take one RMD.
2. Take the 2022 RMD next year (prior to April of 2023) and the 2023 RMD and then roll to the new 401k next year. If he does it next year, has to take two RMDs prior to rollover but shifts income to 2023 if that is preferable.

Am I understanding that correctly?

Thank you!



Yes, both options are valid. Client should communicate his choice to the plan administrator of the former employer if Option 2 is chosen so that the plan does not automatically distribute the 2022 RMD anytime now. Also, client should verify with new plan that it will accept a direct rollover from the former plan.



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