401k RMD still working exception and rolling over a new plan
Our client is age 76 and plans to continue working until 1/2/2026. He has a 401k plan balance and he is less than 5% owner. He did not intend to take his RMD in 2025. His company was purchased and the new owners are establishing a new 401k plan.
If our client rolls 100% of his former 401k plan to the new 401k plan before 12/31/25, does our client have to take an RMD for 2025?
Thank you!
Permalink Submitted by Alan - IRA critic on Wed, 2025-03-05 12:00
No RMD should be required unless the plan does not support the still working exception, but client would know that by now. There might be a risk that the new plan does not support the still working exception. If it does not, then he might do a direct rollover to an IRA instead.
While there would be an IRA RMD in 2026, client will have one for 2026 as well since he plans to retire in 2026.
Good thing that he plans to retire in January rather than on 12/31/25.