RMD’s from multiple plans for a 74 year old participant
Participant is 74 years old, retiring 6/30/16 from a state pension plan which includes 401A and 403b accounts.
RMD can be taken from now until 4/1/2017. Can the 401A and 403b accounts be merged first (into a 403b plan)
and then the combined RMD be distributed from the newly merged 403b plan? Values for each account as of 12/31/2015 are known and documented so the RMD calc is available for audit.
Thanks
Jeanne
Permalink Submitted by Alan - IRA critic on Thu, 2016-06-02 01:21
No, one plan cannot be rolled into the other in an RMD year without the RMD from the first plan being distributed prior to the rollover. I definitely do not recommend doing an in service rollover before retiring if the employer does not yet know of the retirement date, since retirement would then result in the RMD amount becoming ineligible for rollover. The 403b plan would then have to correct this violation with a distribution. Has doing direct rollovers of both plans after the retirement date to one IRA been considered?
Permalink Submitted by Jeanne Weaver on Fri, 2016-06-03 16:09
Was planning on doing the merge after his retirement date, 6/30/16 but before RMD distribution. I was going to straddle the RMD distributions between 2016 and 2017 to reduce taxable income.
Permalink Submitted by Alan - IRA critic on Fri, 2016-06-03 18:58
If you roll the 401a into the 403b, only the 401a RMD must be distributed before the rollover. The 2016 RMD for the 403b could be deferred until 2017.
Permalink Submitted by Jeanne Weaver on Fri, 2016-06-03 22:44
Thanks for your help on this one.