Jump to content

Rollover before Required Beginning Date

Recommended Posts

Has anyone had this come up?

A 401(k) participant is a non-owner, 75 years old, still employed by the plan sponsor.  They take a direct rollover distribution to an IRA in 2024 of their entire $150,000.  They are still working, so no RMD is taken.

They continue to contribute to the plan during 2024 and at the end of the year they have a $5,000 balance.  They terminate on 12/15/2024.  Now an RMD is needed by 4/1/2024.  

Assume the balance on 1/1/2023 was $150,000.  I believe the RMD needed at 75 would be $6097, which is more than what is now in the 401(k) account.

Is the participant required to take the remaining $5000 in the account, plus take an additional $1097 from the rollover IRA by 4/1/2025?

Thank you.

Link to comment
Share on other sites

And of course, I overlooked that it's still the 2024 minimum being paid based off 2023, so I do think they're going to have to recoup some of that IRA rollover to satisfy the RMD.  (And adjust the amount coming out of the IRA for earnings since it was an ineligible rollover contribution.  Hmmm, thinking out loud has me presuming only the "principal" amount coming from the IRA satisfies the RMD for the plan, like you couldn't count some of the earnings towards the RMD.)

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Create New...