RMD requirement date?
if we have a 74 year old that is still working and has a 401k. he is considering an in-service rollover of a portion of the account. We understand the amount rolled into the IRA would now have RMD requirements, but is the 1st RMD due in current year or in 2024? and does it work as any first RMD, there would be a 2nd RMD due in 2024 as well?
Permalink Submitted by Alan - IRA critic on Wed, 2023-02-08 22:42
If the person is not a >5% owner and therefore not subject to 401k RMDs and will also work at least into 2024, a direct rollover to an IRA could be completed with no 401k RMD for 2023, and this new balance in the IRA would not trigger an IRA RMD until 2024. The first year IRA RMD rules do not apply here because the person has already passed the year (probably the year they would have reached 70.5) for which the first IRA RMD would be required if they had an IRA all along.