RMD after resuming working
I retired at 72 in 2018 and have taken 2 RMDs from my 401K account (one for 2018 and one for 2019). My 401K account remains with my previous employer. I have been offered full time employment with another employer that has a 401K account. Can I transfer my old 401K account to my new employer and avoid paying RMDs as long as I am employed with the new employer? If I begin work in March 2020 how do I disposition my 2020 RMD? Is the RMD prorated for the year or must I take the entire 2020 RMD?
Permalink Submitted by Alan - IRA critic on Sat, 2020-02-29 15:21
Your 2020 401k RMD must be distributed before doing any direct rollover, whether to your new plan or a rollover IRA, therefore the 2020 RMD in it’s entirety cannot be avoided. However, if the new plan will accept the direct rollover (less the 2020 RMD) before year end 2020, RMDs for 2021 and beyond can be avoided on this balance as long as you are still employed on 1/1 of the following year. That means you do not avoid an RMD for any year unless you are still employed with the new firm on 1/1/2022.