401k Rolloever–RMD imputed by IRS?
73 year-old person retired from employer in July. Has money in 401k. Wants to pay 2 RMDs next year. Was told that if he rolls his money to an IRA this year, IRA will impute an RMD this year. If that’s accurate, he’ll wait until next year to rollover.
2 questions:
1) can he defer RMD until next year by delaying rollover?
2) because he’s now retired, does he have to take RMD for this year whether the money remains in his 401k or is rolled over this year?
Thanks.
Permalink Submitted by Alan - IRA critic on Tue, 2017-08-29 17:07
What he was told is correct. If he delays the rollover until 2018, there will be no RMD distributed in 2017. If he ALREADY did an in service rollover in 2017 before retiring, the 2017 RMD is imputed to have been included in that rollover and was not eligible for rollover. Otherwise, if he leaves the balance alone in 2017 there is no taxable distribution. When he does the IRA rollover in 2018, both the 2017 and 2018 RMDs must be distributed and not included in that rollover. But if he simply delays the IRA rollover until next year, he does not have to take an RMD from the plan this year.