RMD after retiring at age 72
I am looking for an answer for my brother on his RMD situation in 2023. He just retired in March 2023 as an employee with a company, and then had his entire 401k balance sent as a check by Voya (titled for his IRA as specified by Vanguard) at end of April to an empty rollover Vanguard IRA he opened in early April 2023. Does he have any RMD requirement for 2023 for either 401k or IRA, if he turned 72 near the end of April 2023. I am assuming no RMD for 2023 on IRA because he did not have an IRA balance at end of 2022. Not sure how the 401k RMD works for 2023 with the 401k money just moved to IRA after he retired, and with him working 3+ months of 2023. Thanks for your help!
Cape Retiree
Permalink Submitted by Alan - IRA critic on Mon, 2023-05-01 15:42
The Secure Act 2.0 has increased the RMD age to 73 for those born in 1951-1958. Therefore, there is no 2023 RMD due which explains why the entire balance was included in the direct rollover. His first RMD will be for 2024 from his IRA using the 12/31/2023 year end IRA balance, and that 2024 RMD can be deferred to as late as 4/1/2025, which is his RBD.
Permalink Submitted by Ken Fitzgerald on Mon, 2023-05-01 17:01
Thank you Alan. You are the best, and your answers are always very detailed. I have been taking IRA withdrawals since 2006, when I was 56 and started a 72T, about a year after I started following your replies on these subjects in forums, and the 72T questions that applied to my situation. Everything you have done over the years has always been very helpful! In my case I never worried about when I “had” to start and my W/Ds always exceeded the RMDs after I turned 70. I thought the RMD age went from 70 to 72, and probably mixed it up, or maybe missed the second change to age 73. This is perfect, since he did not want to take anything out in 2023 unless he had to do it. Thanks again to you and others who help us out!!