401k and IRA in the year turning RMD age
I have a client that turned 73 in 2024 and is still working. He has a old 401k, IRA, and employer 401k at his current employer. I know that if he keeps the accounts as is, he’s not required to take RMDs from his employer while working, but is required to take RMDs from the old 401k and IRA for the 2024 tax year by April 1, 2025. Can he transfer the old 401k and IRA to his current employer 401k in 2024 and then won’t be required to take RMDs for those accounts or 2024? Or would that only apply for 2025 and beyond while he’s still working and he would have to take RMDs from those accounts because they were not combined into his employer 401k at the beginning of 2024?
Permalink Submitted by Alan - IRA critic on Fri, 2024-11-08 18:22
If the old 401k and the IRA were rolled into the current plan, the 2024 RMDs would have to be distributed first from those plans. But RMDs would stop in 2025 as long as client did not retire in 2025. Therefore, if he does not expect to work beyond 2025, there is no benefit from those rollovers.
Note that if client is a >5% owner of the current company, RMDs cannot be delayed.
Permalink Submitted by John Hill on Mon, 2024-11-11 11:27
Thanks