RMD - age 89 and retiring

[Cynchbeast]

Non-owner participant is age 89 and retiring this week. He has money in 401(k) and IRAs.

1) After separation from service, must he start RMD from his 401(k) in 2013 or 2014?

2) Can he take some of his IRA RMD from the 401(k)?

[MoShawn]

1) First distribution calendar year is 2013. He must receive the first RMD by 4/1/14. If he delays into 2014, he would need to take a second RMD by 12/31/14 for 2014.

2) No. You cannot mix RMD's from an IRA with a 401(k).

[BG5150]

Nor can you combine 401(k)s. Each qualified plan stands on its own for RMD purposes.

[Cynchbeast]

He intends to rollover his 401(k) into an IRA before the end of this year. Since his first RMD is not due until 04/01/14, can he rollover his entire 401(k) balance now and forget its RMD, or must he take the RMD first before rolling the remainder over?

[BG5150]

No. The first distributions from a 401(k) plan in any RMD year must be the RMD.

[david rigby]

No. The first distributions from a 401(k) plan in any RMD year must be the RMD.

... and is not rollable.

[GMK]

No. The first distributions from a 401(k) plan in any RMD year must be the RMD.

Read this well-stated, concise sentence carefully. (It would not be an "RMD year" if he were still an employee.)

[My 2 cents]

While it is true that it would not be an RMD year if the participant were still an employee, the original post said that the participant was retiring "this week". Presumably, that would mean that the participant ceased to be an employee during 2013, making 2013 the first RMD year. If the participant elects a lump sum distribution, it appears from the above posts that some of it would have to be treated as RMD and not rolled over. As I understand it, if the lump sum is not paid until 2014, presumably two years' worth of RMD (the amounts that would otherwise have had to be paid for 2013 by 4/1/14 and the amount that would otherwise have had to be paid for 2014 by 12/31/14) would have to be carved out from the rollover.

[GMK]

^ I agree. Just emphasing to general readers that it has to be an RMD year before there's an RMD. No RMD if still an employee. Can be confusing.