RMD from two 403b’s
A client is 70 1/2 and has a 403b with an previous employer and is now working for a new employer with another 403b with new employer.
Does she have to take RMD from dormant 403b? Does she have to aggregate the balances of the 2 403b’s in the RMD calculation?
Permalink Submitted by Alan Spross on Fri, 2008-11-21 20:53
Aggregation of the RMD over the two plans is optional but permitted, however the client must first determine what that RMD requirement is.
1) Current plan may have no exception to the year after retirement RMD beginning date, or may require RMDs to start at 70.5.
2) Former plan will have an RMD requirement, however there might be some pre 1987 accruals in the plan which have a required beginning date of age 75.
Once the actual RMD is determined, it can then be aggregated. However, if the current plan has an RMD that is taken from the former plan, the extra amount taken will come out of the pre 1987 accruals thereby reducing the benefit of added deferral time.
Some investigation will be needed to determine the best option.