RMD on a non-governmental 457(b) plan
I have a non-governmental 457(b) plan and when I retired in 2018 I had to fill out a Distribution Election Form to tell my financial institution when to start my payments for the distribution of my RMD. So I elected the last month of this year (2020) since I will be 70-1/2 by then. Then came the SECURE Act and the CARES Act. I talked to my former employer and my financial institution and argued that the new RMD year is now 72, plus the IRS has waived 2020 RMDs. They both said the start of my payment cannot be changed and I must start taking the RMD from my 457(b) this December even though I won’t be 72 yet. So my question is: When I file the 2020 Federal tax return next year, is this RMD just lowering my remaining balance in my 457(b), unlike doing a QCD from my tIRA which effectively lowers my AGI?
Permalink Submitted by Alan - IRA critic on Sat, 2020-08-08 19:40
If you receive this distribution it will increase your taxable income for 2020, but will reduce your plan balance and future RMDs. Since this is a non govt 457, distributions that are in excess of the IRS RMD rules like this one cannot be rolled over to an IRA.
Permalink Submitted by Florina Chuy on Sun, 2020-08-09 03:20
Thanks for the explanation.