RMD over 73 and still working
We have two clients in a 403b that are still working at the charitable company.
One is born 11-10-48 (76) and the other is born 3-4-38 (86)
- do they have to take an RMD even though they are still working or can they wait until they retire?
2. If they retire, prior to the end of the year 2024, they must take their 2024 RMD, correct?
3. but is they wait to retire in Jan 2025, they do not have to take the 2024 RMD, correct?
Thank you
Douglas
Permalink Submitted by Alan - IRA critic on Tue, 2024-10-22 16:30
That’s correct. Their first RMD distribution year will be for the year they retire. But they could defer all or part of that first RMD until as late as 4/1 of the following year.
If they do an IRA rollover, the plan RMD will have to be distributed prior to the rollover. If they are allowed an in service distribution, they should not take it if they think they might retire before the end of the year since part of that rollover will then be an RMD which was not eligible for rollover. This creates an excess contribution to the IRA that must be removed.
If they don’t retire until 2025, there will be no 2024 RMD.