401k plan distribution as RMD
A 75 year old client officially retired from work on April 1st of this year, but took out 15k as a regular distribution on March 15th. Can the 15k March distribution count as her RMD for this year since she took it out in the year of retirement, even though it was a couple of weeks before her official retirement date? Thank you!!
Permalink Submitted by Alan - IRA critic on Wed, 2019-04-17 15:29
Yes, it is credited against the 2019 RMD amount. Since that distribution was an RMD it cannot be rolled over to an IRA except for amounts in excess of the RMD amount. If client now wants to roll over the rest of the 401k plan, the plan should credit the 15k against the RMD (not sure if RMD is more or less than 15k) and only include amounts in excess of the RMD to be included in a direct rollover to an IRA.