75 year old retiree in 2013

Submitted by Betty Kendra on Mon, 2013-07-15 21:17

I have a 75-year old client who retired June 1, 2013. He is not an owner of the company. His 401(k) plan did not require RMDs at 70 1/2 as long as he was an active employee. He does not want to take an RMD in 2013. I believe he is able to defer his 2013 RMD until 2014 at which time he will need to take both the 2013 and 2014 RMD before 4/1/2014. It is also my understanding this is only possible if he leaves the money in the 401(k) and does not roll it over in 2013. Can you please confirm if my understanding is correct? Also if you can cite the IRS rule for this I would appreciate it. Thank you!



Submitted by Alan - IRA critic on Mon, 2013-07-15 21:48

  • You are mostly correct, although the 2014 RMD does not have to be taken until 12/31/2014. In 2013 client can take out any or all of the 2013 RMD, by 4/1/2014 client must complete any remaining portion of the 2013 RMD and by 12/31/2014 he must complete the 2014 RMD. This and various cites are included in the following definition of “required beginning date”” http://www.retirementdictionary.com/definitions/requiredbeginningdaterbd
  • Before he does an IRA rollover, the RMD for that particular year must be distributed.
  • Note that IF he had done an IRA rollover before retiring, his retirement any time in that same year will result in the rollover including the RMD for that year and to the extent of the RMD there would be an excess IRA contribution.

Submitted by Betty Kendra on Wed, 2013-07-17 20:11

Thank you so much for your reply.

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