By Ian Berger, JD
IRA Analyst
Question:
One of our clients wants to cash out his IRA and then roll it into a Roth IRA within 60 days. Can this be done directly, or does it have to be rolled back into an IRA first and then converted?
Thanks,
Samuel
Answer:
Hi Samuel,
A Roth conversion can be done through a direct rollover to the Roth IRA or a 60-day rollover. However, not all custodians will allow the 60-day rollover.
Question:
I read in your book that if I’m still working and reach age 73, I don’t have to withdraw required minimum distributions (RMDs) from my 401(k). But I do have to draw them from my IRAs.
What if I have a SIMPLE IRA at my work? Do I have to withdraw from that while still working?
Thanks,
Chris
Answer:
Hi Chris,
SIMPLE IRAS are tricky because they are sometimes treated like IRAs and sometimes treated like company plans. For the RMD rules, SIMPLE (and SEP) IRAs are treated like IRAs. So, you will need to start RMDs from your SIMPLE at age 73. This is true even if you can delay RMDs from your 401(k) under the “still-working exception.”