Transferring my 401k from my X employer to my new privately held company
I lost my job at a company that I have my 401k at. I would like to move it to a new company that I am the sole owner of. I would like to establish a 401k with my new company. I am 72 and do not need the money in my 401k and would like to avoid paying RMD on it. I realize I will need to pay RMD at some time, but I would like to delay it for a few years.
So, is it possible to create a new 401k at my company and continue contributing to it without paying RMD. I do not want to transfer it to an IRA … Since I will need to pay RMD on the amount of $s that will be in my IRA. Thank you in advance
Permalink Submitted by Alan - IRA critic on Fri, 2022-12-02 18:25
Since you would obviously be a >5% owner of your own company, you would be subject to 401k RMDs at 72 in the same manner as your IRA RMDs. If you became employed at a company where you owned less than 5% of the company, you could roll your IRA into their plan if their plan accepted IRA rollovers. That would not eliminate your RMD for 2022, but it would eliminate it in the year AFTER the year in which the rollover to a new non IRA employer plan occurred. You would be looking for a company with a 401k that accepts rollovers from your old 401k, or from an IRA if you first rolled the old 401k to an IRA.
Permalink Submitted by Mike Mihuc on Fri, 2022-12-02 18:33
Thank You !
Permalink Submitted by Mike Mihuc on Fri, 2022-12-02 18:44
If I find a company that will permit a 401k rollover, Will I need to complete this by Dec 31, 2022 so as to not be required to pay RMD in 2023 on my X 401k? ….. I already paid my RMD for 2022
Permalink Submitted by Alan - IRA critic on Fri, 2022-12-02 20:02
Yes, you need to have directly rolled the old 401k over to such a plan prior to year end 2022 to avoid a 2023 RMD. There is very limited time to locate a position with a 401k that accepts rollovers and will do so immediately without a waiting period. You could do a 60 day rollover, completing the distribution this year but not the rollover, but you would need to have enough cash to replace the mandatory 20% withholding to complete the rollover contribution. If you could not locate the new employer, then you would have to complete the rollover to an IRA, which would leave you no better or worse off than you are now with respect to the 2023 RMD.