inherited 403-b for RMD counted towards IRA RMD’s
have client who inherited a 403-b and using a 5yr deferral. She takes out $75,000 per year for the next 5yrs. Her actual RMD from the inherited 403bh would be approx. 12k per year, but she decided to take the 5yr deferral and spread the taxes over 5yrs.
Her private IRA-RMD totals around 18k per year.
a Does the 403b inherited income of 75k count towards her total RMD of all her IRA’s?
or
Does she still have to take her RMD from her private IRA’s?
thank you,
Douglas
Permalink Submitted by Alan - IRA critic on Thu, 2015-02-26 22:37
She still has to take the IRA RMDs for any of 3 separate reasons. IRA RMDs and 403b RMDs are totally separate from each other. In addition, inherited accounts are always separate from owned accounts, and 5 year rule distributions are always separate from life expectancy RMDs.
Permalink Submitted by Douglas Bauerband on Fri, 2015-02-27 17:39
does this mean that if a client has 2 IRA’s and one 2 403b’s:a. he has to take the rmd from the ira’s and 403b’s seperately?b. He cant take out from the IRA’s to cover the rmd’s from the 403″b and visa a versa?c. does the 403b’s work the same as the IRA’s were yuo can take the rmd from one to cover both?Thank yuoDoug
Permalink Submitted by Alan - IRA critic on Fri, 2015-02-27 18:29
The inherited 403b RMD can only be combined with other 403b plans inherited from the same decedent and life expect. Owned IRAs can only be combined with other owned IRAs, and inherited IRAs from a decedent only with other inherited IRAs from the same decedent. The rules for 403b and IRAs are the same with respect to RMDs, but an IRA RMD can never be combined with a 403b RMD. Also note that an inherited 403b (or inherited IRA) RMD under the 5 year rule cannot be combined with an inherited plan using life expectancy.