RMDs for a client that opens an IRA past age 72
I have a client that is still working and part of a workplace 401k. She will turn 73 later this year. She is taking an in service distribution and rolling it into a brand new IRA with me. Since the IRA is brand new she won’t have to take an RMD until 2023 correct? I can’t come up with a scenario where she would have to take her first RMD this year even though she is past age 72. Just double checking. If she does have to take one this year how would the RMD be calculated? Thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2022-03-10 03:49
That’s correct, no IRA RMD until 2023. However, if she were to retire from the 401k provider prior to 2023, then 2022 would become her first 401k RMD distribution year, and the IRA rollover distribution she is doing now would then be applied to her 401k RMD, and the amount of that RMD would not have been eligible for rollover to an IRA and would have to be withdrawn as an excess IRA contribution. Therefore, retiring in 2022 is the only way she ends up with a 2022 401k RMD.