1st Minimum Distribution to IRA? If I don’t have an IRA now?


I am already retired and next year I will have to start taking out minimum distributions. I do not currently have an IRA. Can I set up an IRA with the first minimum distribution?

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Asked on April 19, 2017 1:38 am
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No. You cannot roll over an RMD to another tax deferred account; the purpose of a required minimum distribution is to get you to take money out of your tax deferred retirement account (e.g., TSP) and pay taxes on it.
Now, if you have earned income next year, and meet the income restrictions for contributing to a Roth IRA, you can contribute the lesser of your earned income or $6,500 to a Roth IRA. The IRS doesn’t care where the money that you use to fund the Roth IRA comes from, as long as you have enough earned income to make the contribution.
You are not allowed to contribute to a Traditional IRA beginning with the year in which you reach the age of 70 1/2.
A simple definition of earned income (maybe too simple) is money you make from working (either for someone else or for yourself).
The Roth IRA income restrictions can be found in IRS Publication 590A.

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Posted by (Questions: 0, Answers: 64)
Answered on April 19, 2017 1:02 pm