RMD for IRA and 401K

[S T]

Taxpayer will be 70.5 year 2016 and needs to receive RMD

Taxpayer has an IRA account, that she is already receiving distribution on, which does exceed the RMD on that account.

The question is

If the 401K account is a separate account, still under a Employer's 401K plan - there needs to be a separate RMD for that account?

If taxpayer distributes the 401K on a rollover IRA - then the original IRA and the rollover IRA can then be combined for one RMD?

Thanks

Sandy

[Snaggletooth]

Aggregate Amount is Relevant

Sandy, I believe the RMD is determined by the percentage of ALL such accounts in total, and there is no requirement that each separate account issue an RMD of its own.

This means the taxpayer can pick and choose which account(s) from which to take the RMD.

[BOB W]

If client is still working and over 70.5 and has 401K or any of the 403xxx, is rmd required?

[Gene V]

If client is still working and over 70.5 and has 401K or any of the 403xxx, is rmd required?

Bob,
For Qualified plans, RMD begins by April 1 of the year following the LATER of the year.
The employee turns age 70 1/2 or
The year the employee retires.
See TTB page 13-23 bottom right side of page and page 24

[BOB W]

Bob,
For Qualified plans, RMD begins by April 1 of the year following the LATER of the year.
The employee turns age 70 1/2 or
The year the employee retires.
See TTB page 13-23 bottom right side of page and page 24

Thanks Gene V. Can he can still contribute when over 70.5?

[New York Enrolled Agent]

Sandy, I believe the RMD is determined by the percentage of ALL such accounts in total, and there is no requirement that each separate account issue an RMD of its own.

This means the taxpayer can pick and choose which account(s) from which to take the RMD.

Snags - if I understand your post, a little disagreement here.

You can pick and choose to satisfy the IRA RMD from any IRA accounts.

You can pick and choose to satisfy the 401K RMD from any 401K accounts.

But you cannot combine the IRAs and the 401Ks in total and pick and choose to satisfy the total RMD.

[S T]

Taxpayer is retired.

More information at TTB 13-25 - Other RMD Rules, also Ed Slott has an article regarding multiple retirement accounts and RMD's

IRA accounts multiple can be aggregated and distribution from only one of the IRA accounts

401K plans - one or multiple - distribution for RMD must be from each of the 401K plans and maynot be aggregated or aggregated with an IRA account

You or your client has several retirement accounts. Can you take the required minimum distribution (RMD) from just one account? The answer is maybe.
Let’s start with what you cannot do. You cannot take the RMD for one type of account from a different type of account. You cannot take an employer plan RMD from an IRA or vice versa

Thanks

Sandy

[S T]

Thanks NYEA for your post, that is confirmation on what I found and we were both posting at approximately the same time

Question, if taxpayer decides to roll over her 401K plan to an IRA - then all accounts would be IRA and you could use the aggregate?

Sandy

[S T]

You can pick and choose to satisfy the 401K RMD from any 401K accounts.

I find this to be contradictory - If you have 401K accounts at several employers I read that you are required the RMD for each account - can not aggregate 401K accounts or aggregate with 403B

An RMD must be taken from each employer plan that you might have. If you have two 401(k)s and a 403(b), you must take 3 separate distributions – one from each 401(k) and one from the 403(b). There is an exception for 403(b) plans. If you have more than one 403(b), you can calculate each RMD and then combine them and take them from any 403(b) account you

Question - if taxpayer completes a successful rollover on the 401K account to an IRA - for future years, then all IRA accounts could be calculated on the aggregate?

Sandy

[Snaggletooth]

NYEA is correct

Sandy, NYEA is correct. I do believe if all of the retirement could be consolidated into IRAs via rollovers, he could literally pick and choose.