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Can required minimum distributions from a 401(k) be transferred to a Roth IRA?

I will be 70.5 years old this April. I have $110,000 In my 401(k). I’m debt free with an AGI of $80,000. I have a 1.5 year emergency fund and two annuities valued at $350,000 (both have a five-year surrender period remaining). Since I will be taking RMDs this year, I was wondering if I could transfer the 401(k) RMDs to a Roth IRA and if it would provide any tax benefits in the future over a brokerage account? I assume I still include the amount as income even if I move it to a Roth? I plan to use a portion of the annuity RMDs as a qualified charitable contribution to offset my AGI some. Other than this, I’m not sure what other options are available to reduce my tax burden.

Debt, Financial Planning, 401(k), Annuities, IRAs
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March 2019

Your question left out a critical piece of information, which is whether or not you are still working.  If you are still employed at the company where you hold your 401(k) then you do not have to take a required minimum distribution until April 1 following the year when you stop working.  In that case you can easily convert (not transfer; that is the wrong word) as much of your 401(k) into a Roth IRA as you wish each calendar year.  The best approach is usually to do this gradually so your conversion doesn't put you into a higher tax bracket; use up the full amount which remains in your current bracket especially when your marginal federal tax rate is 24% or less.

However, if you have already left the company which holds your 401(k) then you must begin taking required minimum distributions.  Such distributions can never be converted into Roth IRAs which would violate federal law.  However, once you have taken your required minimum distributions, you can convert as much of your remaining 401(k) as you wish into a Roth IRA each year.  This will also reduce your total balance in your 401(k) which will make your future required minimum distributions smaller.

March 2019
March 2019
March 2019