RMD for Retiring 75-Year Old
[b]Help me Obi-Wan-Ed-Slott Forum….you’re my only hope.[/b]
I have a 75-year old client with a 403b and an old 401k who will be retiring this September and I am unsure how to handle her initial RMD.
[b](1)[/b] Is a distribution required for 2008 or will a distrubution not be required until 2009?
[b](2)[/b] In either case, are we able to roll the accounts to an IRA first and then take the distribution?
[b](3)[/b] If a distruibution is required from both the 401k and the 403b before they are rolled over, can we take the total amount of her distribution from just one plan?
You all are the experts so I hope you can help with this. I haven’t been successful elsewhere.
Thanks!!
Permalink Submitted by Alan Spross on Wed, 2008-08-13 21:57
1) If 401k is from a prior employer, RMDs should have been taken in prior years. The required beginning date was either 4/1 following the year of retirement or 4/1 following the year of her retirement from that company.
For the 403b with current employer, if she retires this year, then 2008 is a distribution year, but the 2008 RMD can be deferred until 4/1/09.
2) No. The RMD for the year of the IRA rollover must be withheld from the rollover and distributed to the employee. It cannot be transferred to the IRA and then taken from the IRA. The plan administrators should know this, but sometimes mistakes are made.
3) No. Each plan must satisfy it’s own RMD unless she has more than one 403b.
Permalink Submitted by Lance Turner on Thu, 2008-08-14 17:54
Thank you, alan-oniras!
I appreciate you answering all three of my questions so completely.