401k rollover to an Ira while still working at age 74
Hello,
I have a prospect who rolled over his 401k to an ira in mid 2017 at the age of 74, still working and will work through the remainder of 2017. He plans to retire in 2018.
My understanding is that he’d need to take the RMD this year based on the 12/31/16 IRA value, however, this ira didn’t exist at that time. Is he still subject to taking out the rmd? Or does he have until next year in which he will have a “previous end of year balance”?
Thank you!
Permalink Submitted by Alan - IRA critic on Wed, 2017-12-27 04:48
There is no IRA RMD for 2017 since there was no 12/31/2016 value. And there is no 401k RMD (unless prospect was a 5% owner) as long as he is still working at the end of 2017. There will be an IRA RMD for 2018 based on the 12/31/2017 IRA value.