RMD from a 401K
A friend of ours is 73 years old and quit his job in Aug 2018. He had been contributing to the 401K. Now that he is not working for the remaining months in 2018, does he have to take the RMD from his 401K in 2018 or is there a grace period so that his first RMD will be in 2019. Thanks for your opinion
Permalink Submitted by Alan - IRA critic on Sun, 2018-10-07 17:17
2018 is his first RMD distribution year, but the 2018 RMD can be deferred up to 4/1/2019 in whole or in part. If he defers he will have two RMDs taxable in 2019, however he will have no wages in 2019 compared to 8 months worth in 2018. The best approach depends on number crunching. Note that any IRA rollover will require RMDs up through the year of the rollover to be completed no later than the date of the rollover.
Permalink Submitted by n2b on Tue, 2018-10-09 17:56
Thank You Alan. Your response was very clear and helpful