RMD
If someone is over 70 ½ years old and still working for an employer with a 401K, can they rollover an IRA into the 401K to avoid taking the RMD? Thanks Julie ❓
If someone is over 70 ½ years old and still working for an employer with a 401K, can they rollover an IRA into the 401K to avoid taking the RMD? Thanks Julie ❓
Permalink Submitted by Alan Spross on Tue, 2008-04-01 21:53
Yes, if the employer plan will accept it and IF the plan does not require RMDs at 70.5 and IF you are not a 5% owner. The IRA RMD would still be due from the IRA in the year of the rollover prior to the rollover, but future IRA RMDs would be avoided for years that did not have a prior year 12/31 IRA balance.
An employer plan does not have to follow the IRS RBD rules, and a small number of them do require RMDs at 70.5 even for those still working there.
An employer plan cannot accept non deductible contributions, and many of them will not accept incoming IRA rollovers unless the IRA account was a former employer plan rollover.