RMD & Roth 401k

Submitted by B Lee on Mon, 2015-05-25 18:50

My 401k has regular 401k and Roth 401k. Should I transfer all Roth 401k balance to Roth IRA the year prior I reached 70 1/2 in order to have a lower 401k balance when calculate for the 1st RMD when I reached 70 1/2?

The year I reached 70 1/2, can I do some 401k to Roth 401k conversion before taking out 1st time RMD? The RMD calculation is base on prior year end balance or prior year end balance less 401k to Roth 401k conversion? Are future year rules same as 1st RMD year?

Can I switch between automatic and self RMD calculation every year or I must declare and stick with same one every year until 401k balance reach zero?



Submitted by Alan - IRA critic on Mon, 2015-05-25 23:13

  1. Yes, you should do a direct rollover of your Roth 401k balance to a Roth IRA if you want to avoid Roth 401k RMDs. This must be done by the end of the year prior to the year you will reach 70.5 or the year before you will retire, if later.
  2. Once you are in RMD distribution year, you cannot do an IRR until after you take out the RMD. You would then be taxed on both the RMD and the IRR. This applies to all RMD distribution years.
  3. I do not understand this question. The RMD calculation should be the same regardless of who calculates it. If you let the plan administrator handle your RMD, the plan should allow you to handle your own RMD if you wish to. That may affect when you have the RMD distributed, especially in your first RMD distribution year when the RBD is in the following year.

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