IRA Rollover to 401(k) after age 72
My client is over 72, has an IRA and is still working. He is not an owner of the company. If the plan permits rollovers, is it possible to move his IRA to the 401(k) and stop the yearly RMD? If he does this in 2023 does he need to meet the RMD that was calculated in 2023 before doing the rollover?
Permalink Submitted by Alan - IRA critic on Mon, 2022-12-05 16:08
Yes, RMDs will stop for the IRA balance, but not until the year FOLLOWING the rollover year. Client would benefit in 2023 and beyond, but would need to take the IRA RMD for 2022 and complete the rollover before year end for the RMD reductions to begin in 2023. Client cannot reduce RMDs for 2022. Further, for the reduction to apply in 2023, the client still needs to be employed with this employer on 1/1/2024. There will be a full 401k RMD due for the year in which client retires, so for this strategy to work client needs to determine what the likely retirement year will be.