Strategy to avoid taking RMD from equity Ira
My husband has a 457 (no QCDs allowed) from the state he retired from. It’s not in an equity fund. He also has an IRA with Vanguard (VTSAX) from which we would prefer to not take his RMD due to the market drop. RMD has already been taken from the 457. In order to avoid taking RMD from his equity IRA, can we transfer money from the 457 to the brokerage account of the Vanguard IRA, then take the VTSAX RMD or QCDs from that?
Permalink Submitted by Alan - IRA critic on Fri, 2022-11-18 00:06
Yes, since the 457b RMD has been satisfied, an additional amount could be directly rolled into the IRA in cash, and then a QCD taken using the cash. The QCD would offset the taxable income and count toward the 2022 IRA RMD to the extent of the QCD, and the rest of the IRA RMD could be satisfied with an additional cash distribution. If he does not want to repeat this process annually, he should roll over the entire remaining 457b balance to the IRA, then things will be simpler in 2023.