75 Years Old – Still Working – Partial Rollover from 401K to IRA
Client is 75 years old and still working but at a reduced schedule. Client is still participating in, and contributing to, 401K but, in anticipation of retiring sometime in 2024, rolled over then existing balance in 401K in late December 2023 to a newly opened IRA. While no RMD needed to be taken from 401K, should an RMD have been taken from the new IRA for calendar year 2023? 401K plan administrator advised client no RMD for 2023 needed in this situation, but not so sure that is the correct answer for the IRA.
Permalink Submitted by Alan - IRA critic on Sat, 2024-03-02 20:59
No, the first IRA RMD on this balance will be for 2024 using the 12/31/2023 balance. However, if there is any balance left in the 401k, the 2024 401k RMD should be distributed before any direct rollover done in 2024 if client will be retiring before the end of 2024.