Rolling over RMD from Traditional IRA to Roth IRA
I already know the answer to this question, but I have a client who is being told something different from another advisor. He is being told that he can “rollover” his RMD (which he doesn’t need) into his existing Roth IRA account. I told him that no, you are not allowed to roll an RMD into any other tax-qualified plan, but that if he still had earned income, he could make a Roth IRA contribution for himself and his wife from the after-tax RMD withdrawal. Could you do me a favor and just confirm that RMD’s cannot be rolled over into a Roth IRA? Thanks so much. Bill
Permalink Submitted by Alan - IRA critic on Wed, 2020-03-11 14:25
You are correct, an RMD cannot be rolled over and a conversion is a rollover. That said, the RMD in this case is the RMD for only the particular IRA account that funds the conversion. For example, if client had 3 IRA accounts of 100k each and each IRA account’s RMD was 5k, client could take the 5k RMD from one of them, then convert the rest of that IRA account, and later in the year complete the other 10k of RMDs. This strategy could be used to a conversion early in the year, while taking the RMD from other accounts toward the end of the year.