Hello,
I have a client that is currently 56 years old and has an old 401k from a prior employer. He currently has appreciated stock within the account and is interested in doing an NUA transaction in the future. He has already satisfied the separation from service triggering event. Are we able to do a rollover of all funds besides the company stock now, then do NUA after he turns 59.5 since he will have another triggering event?
Thanks!
No. Same rules apply. Note that if the participant has both ESOP and 401k balances, because these are treated as similar plans, a LSD must be completed for both plans even if the employer shares are only held in one of those plans.
I have a 40 year-old client with an NUA opportunity within an old 401k plan from her former employer. It’s been years since my client was employed by that employer. Is “separation from service” as a triggering event specific to the sponsoring employer of the 401k plan? Does any change of employer in the future qualify as a triggering event for that calendar year?
Permalink Submitted by Alan - IRA critic on Wed, 2023-01-18 17:53
Yes, as long as the plan allows partial distributions. If so, client will then have to wait until 59.5 for the new triggering event before completing the LSD for NUA purposes.