401(k) RMD Timing in year of retirement
Client (age 74) retired in Oct 2018. He has assets in a 401(k) from the company he just retired from and assets in an IRA. He has been taking RMD’s from his IRA since age 70 1/2 and will continue to do so. With his income dropping in 2019, he would like to defer the 401(k) RMD until 2019. I believe that he can elect to defer the year of retirement 401(k) RMD until April 1. 2019 even though he is over age 70 1/2. Can you please confirm this? Thank you.
Permalink Submitted by Alan - IRA critic on Wed, 2018-11-21 20:01
Yes, he can defer all or part of his 2018 401k RMD to early 2019. His IRA RMD has no bearing on that option. But this also means that he cannot do a 401k to IRA rollover this year or that would require that his 401k RMD for 2018 be distributed this year also, before the IRA rollover. If he delays the 401k RMD until 2019, then he will need to take 2 years of RMDs in 2019 from the 401k.