3 Replies Latest reply on Feb 26, 2015 10:45 AM by tozenne

    RMD vs. Roth Conversions

    tozenne

      Leaving aside income tax issues (which can be huge), suppose someone wants to convert all or a substantial amount of one's TIAA-CREF (403b) account to a Roth account. 

      Does the IRS, and/or, TIAA require that one has "first" satisfied this year's required minimum distribution, or is it sufficient that the RMD will be met without regard to timing? 

      (Yes, I know that amounts satisfying the RMD cannot be invested in a Roth.  I'm addressing two separate draws.  )

        • Re: RMD vs. Roth Conversions
          MyR Community Manager

          tozenne, thanks for starting a discussion thread about this important topic! I look forward to seeing how others respond.

          • Re: RMD vs. Roth Conversions
            JerryD

            This issue has recently been discussed by the TIAA-CREF Forum over at morningstar.com on the Discuss tab. Short answer is, I believe, that you have to take your (IRA) RMD before you can then do a Roth conversion. To me, that is no big deal if one takes a lump sum RMD and then next does an IRA -> Roth conversion.

             

            There may be some other variations with non-IRA scenarios but that would best be asked over there.  GOOD LUCK!!!!   :-)))

             

            PS: Oooops!!! Link corrected.

              • Re: RMD vs. Roth Conversions
                tozenne

                I've not researched the full issue yet, but this seems fairly authoritative: Post View: Re: Transfers and RMDs

                 

                (Moringstar.com, not .org).  There are countless discussions there, of course, but I think it is correct that IRS has a silly rule which it can't enforce, and some brokers (maybe including TIAA) try to force "compliance" even though they don't have to and aren't on the hook anyway (well, maybe it lowers the chance that the broker itself with be audited by IRS, which these days might be troublesome)