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March 5, 2013

Take RMD before Converting to Roth IRA


Only amounts that are rollover eligible can be converted or rolled over to a Roth IRA. Required minimum distribution (RMD) amounts are not rollover eligible. If you are age 70 ½ or older this year, and want to convert assets from other retirement accounts to your Roth IRA, make sure that your RMD amounts are taken before initiating the conversion to the Roth IRA. Leaving the RMD behind is neither a solution nor an option. If the RMD is not taken before the conversion/rollover occurs, then –technically- the conversion includes the RMD amount, thereby creating an ineligible conversion. It is important to note that only the RMD amount would be considered an ineligible conversion and not the entire amount.

Tip by Denise Appleby

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 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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