401k rmds
i have a 73 year old client who has a 401k with $300k and he does not have to take rmds since he is still working (and is not a 5% owner of co). if he rolls $200k to an IRA this year, 2014, does he have to take an RMD this year/right away on that portion?
Permalink Submitted by Alan - IRA critic on Wed, 2014-09-17 20:17
No, unless he retires before the end of the year, as that would make 2014 an RMD distribution year for the entire 300k. IRA RMDs on the 200k will begin in 2015 based on the 12/31/2014 balance.
Permalink Submitted by Colin Meeks on Thu, 2014-09-18 02:53
so if he does an in service rollover to a IRA for $200k, keeps $100k in the plan, keeps working until 1/1/2015, he will not have to take an RMD on the IRA he established to take the rollover?thanks
Permalink Submitted by Alan - IRA critic on Thu, 2014-09-18 03:52
That is correct. He must have an IRA balance on the prior 12/31 to have an RMD due the following year. There was no IRA balance on 12/31/2013, so no IRA RMD required in 2014.