401k & IRA RMDs

Submitted by Scott Gelbach on Tue, 2017-03-14 17:44

A client has 150,000 in a 401k and we rollover it into an IRA. Will the IRA be subject to RMDs even if we take the RMD from the 401k before the rollover? Also, can we take RMD’s from this IRA to satisfy the RMD’s required on other IRA accounts the client has?



Submitted by Alan - IRA critic on Tue, 2017-03-14 17:52

  • If the 401k is subject to RMDs, the RMD must be distributed before rolling the balance to an IRA. The increased IRA balance from this rollover will not increase IRA RMDs until the following year. In other words, on this particular 150k, the RMD for the rollover year comes from the 401k and for years after that from the IRA. There is no doubling up of RMDs in the same year.
  • IRA RMD aggregation rules apply. The IRA RMD for all IRA accounts can be taken in any combination over those accounts. This means that in the year the IRA receives the 401k rollover, any IRA distribution from that IRA is applied to the total IRA RMDs for all IRA accounts for that year.

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