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March 6, 2009

Can an RMD be Rolled Over?

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Can an RMD be Rolled Over?

QuestionI began receiving required minimum distributions from my company’s retirement plan. Can l roll over these amounts into my IRA?

Answer

No. Rollovers to IRAs of required minimum distributions (RMDs) from a different retirement plan are not permitted. This is true whether the RMD is made because you turned age 72 or because you retired after age 72. If you receive your entire account balance in a lump sum, any portion that is an RMD cannot be rolled over, but the remainder can be. For example, if you are retired from the company holding your retirement plan and turned 72 this year, part of any lump sum received this year cannot be rolled over because the lump sum will include your first year’s RMD, even though your first year’s RMD can be put off until April 1 next year.

*******This Q&A was taken from the IRS’s Summer 2008 Employee Plan Newsletter ******

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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