Once you take your first RMD at 70 1/2, can you still rollover your 401k, plan permitting, to your new employer?

Submitted by Gerri Fehst on Fri, 2019-04-12 10:27

As a Federal government retiree with a TSP, I turn 70 1/2 this year and haven’t yet taken my first RMD. I have until April 15, 2020. This year I also started a new part time job (16-24 hours a week) which has its own 401k. Both traditional and roth 401ks are options (I chose the Roth 401k option). My new plan allows for rollovers from the old plan. My question is once you start taking RMDs, are you still able to rollover your TSP to the new plan to postpone any future RMDs? Or once your start, do you have to keep taking RMDs, no matter what? My TSP is traditional and would have to be rolled over into the traditional 401k option. Thank you.



Submitted by Alan - IRA critic on Fri, 2019-04-12 16:01

  • No, you have until 4/1/2020 of the year following your first RMD distribution year.  To your question, once you take your RMD from the TSP for the year of any rollover (plus any prior year RMDs not completed), if you roll the TSP to a new employer plan in which RMDs are not required due to the “still working” exception, the RMDs on that balance stop until you separate from the current employer.  That would also work for an IRA balance rolled over to a new employer where you are working.
  • That said, if you have a large TSP balance with the usual very low expenses ratios, be aware of rolling it over to a new plan with high expenses ratios. A large difference could offset much of the advantage of postponing RMDs.

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