Partial 401K in-service rollover to IRA at age 74
I am 74 years old and subject to an RMD in my IRA account. I am still working and would like to do an a partial direct in-service rollover from the 401K account I have with my present employer to my existing IRA. I want to do this rollover of 75% of my 401K account to my IRA in January 2023. My question is, will I be subject to an immediate RMD from the 401K account upon transfer, or will this money just be added to the value of my IRA and the RMD will be due in 2024 on the total value of my IRA on December 31st 2023 ? Thank you.
Permalink Submitted by Alan - IRA critic on Fri, 2022-11-18 23:07
The latter. But note that if you retire before 1/1/2024, then 2023 will become a 401k RMD distribution year, and whatever amount of that RMD is will be deemed to be part of your rollover, will become taxable, and will be an excess contribution to the RMD. Your 401k RMD will be satisfied, but this will create a reporting hassle for you. Therefore, if you plan to retire anytime in 2023, I would postpone the rollover until after you retire. As for the IRA, your IRA RMD will not be affected until 2024 by a 2023 rollover into the IRA.