RMD in year of retirement
I have a client who is 72 this year and has been actively working so she wasn’t required to take a RMD from her 401(k), but she is retiring in June this year. Is she required to do her RMD from the plan before her rollover? Would she use the table for a 72 year old? Also, does she have to do a RMD from her IRA this year too if she does a rollover?
Thank you.
Permalink Submitted by Alan - IRA critic on Fri, 2013-01-18 19:53
She must take the plan RMD for 2013 before doing a 2013 IRA rollover. The plan RMD is based on the 12/31/2012 balance and the age she will attain by 12/31/2013. If she left the 401k alone, she could defer her 2013 RMD up to 4/1/2014, but in 2014 she would have to distribute 2 years of plan RMDs before doing a 2014 IRA rollover. The IRA RMD is not affected by the rollover in the year of the rollover, but in the following year the IRA balance will be higher because of the additional funds and the IRA RMD will therefore be higher in the year following the rollover. If she will be 72 this year, she has an IRA RMD due irrespective of these rollovers if she had an IRA balance prior to the rollovers.