How to Sidestep Required Minimum Distributions From Roth 401(k)s

You usually have to take RMDs from a Roth 401(k) after age 70½ — unless you convert the account to a Roth IRA.

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Question: Is it true that you have to take RMDs from Roth 401(k)s, even though no taxes are due? Can I roll over the money from the Roth 401(k) to a Roth IRA to avoid having to take RMDs?

Answer: Yes to both questions. You have to take required minimum distributions from Roth 401(k)s after age 70½, even though the withdrawals are not taxable. As with any 401(k), though, you may be able to delay taking the required withdrawals if you’re still working for that employer past age 70½ (unless you own 5% or more of the company). You must calculate your RMD for each 401(k) and withdraw the money separately from each account -– see 6 Steps to Cutting Your Taxes When You Start Taking RMDs for details.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.