RMD in the year of rollover from 401K (77 yo retiree)
Hello,
I have a 77-year-old client who retired earlier this year. He’s about to rollover his 401K to an IRA.
Do we start taking the RMD based on his 2022 year-end balance? or do we have until next year?
Thank you!
Permalink Submitted by Alan - IRA critic on Thu, 2023-08-24 16:59
The 401k administrator must distribute the 2023 RMD prior to the direct rollover or simultaneously with the direct rollover. If they fail to do that the 401k RMD is still treated as satisfied, but with an excess contribution of the RMD amount made to the IRA, and that excess will have to be corrected to the extent it exceeds the amount eligible to be contributed to the IRA as a regular contribution. Again, there is no IRA RMD for 2023, just the 401k RMD.