RMD from 401k/403b

Submitted by Ryan Shenk on Thu, 2023-07-27 16:28

If I have a 401k and 403b, where I am not more than a 5% owner, then it is my understanding that I will not have to take the RMD when I am 73. I do have IRA’s and I understand that I will have to take an RMD at age 73 based on the December 31st value from the previous year.

My question is this: If I ROLL OVER money from my 401k or 403b to my IRA during the year I turn 73, I assume I would need to add that value to the December 31st value in order to re-calculate the RMD for the year to include the December 31st balance and the rolled over amount, correct?



Submitted by Alan - IRA critic on Thu, 2023-07-27 17:21

  • No. If you are still working the entire year for the 401k or 403b employer, you can roll over some portion to an IRA, but the amount rolled to an IRA will not be subject to IRA RMDs until the following year. You will use the actual year end balance of the IRA to determine the IRA RMD only for the following year.
  • If you roll out of the 401k or 403b plan and then retire later in the same year, a portion of the rollover will then be considered the RMD for the 401k or 403b and because RMDs are not eligible for rollover will have to be removed from the IRA as an excess contribution. 
  • If you want to delay IRA RMDs and plan to work for a time beyond age 72, and if the 401k accepts IRA rollovers, you can roll the IRA (after completing any IRA RMD for that year) into the 401k and therefore delay all RMDs until the year you retire. Many people do this to avoid having earned income and RMDs in the same year.

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