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Timing and RMD
Old 11-11-2016, 06:30 AM   #1
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Timing and RMD

Each year I move some money from my wife's traditional IRA to a Roth IRA. I will be doing this again in a few days for 2016. She will be turning 70 in about a month on Jan 16, 2017. That would mean she turns 70 1/2 in July 2017. Will I be able to make one last conversion in 2017 or is this year the last time?

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Old 11-11-2016, 06:49 AM   #2
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You can still do conversions in the future. However once you start taking RMDs you must do that full RMD withdrawal before doing additional withdrawals for Roth conversion.

You may be asking a specific question about next yr.......since the RMD is technically not due until April 1, 2018 for the first RMD, are distributions taken before that considered normal (non-RMD) distributions that you can convert to Roth.
A good technical question........you may want to post in the retirement forum at fairmark.com and get Alan S.'s wisdom.

My guess (and only that) based on this from a Schwab brochure:
"For any account with an RMD, any distribution
from that account during the year will count
toward that year’s RMD. "

is that any distribution from the IRA in the yr you turn 70.5 (even before you turn 70.5) is considered RMD and are not eligible to be converted to Roth until you have withdrawn the full amount of the RMD.
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Old 11-11-2016, 09:58 PM   #3
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I suppose I muddied the water a little. What I intended was to find out when my wife would have to start RMD. It looks like it will start in the 2018 tax year.

I was also trying to use that information to figure in how it would affect my taxes if I also made Roth conversions.

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Old 11-11-2016, 11:43 PM   #4
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.................... What I intended was to find out when my wife would have to start RMD. It looks like it will start in the 2018 tax year................
RMDs typically start in the yr you turn 70.5 so that would be 2017. You can delay the 1st RMD to April 1 of the following yr but........that means that you would then take another RMD before 12/31 of that same yr (2018). ....so
2 RMDS in one yr or 1 in 2017 and the other in 2018.........or some part in 2017 and the remainder in 2018...........depending on your tax situation, one or the other may be preferred.
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Old 11-11-2016, 11:48 PM   #5
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I think it may be a little more complicated. She will be 70 1/2 in 2017, so her first RMD will be 2017. Her second RMD will be 2018. And so on. Each RMD must be taken by Dec 31 of that year, except the first one may delay until April of the following year.

So this means the first RMD could be as late as April 2018, but the second RMD will still be due Dec 31 of 2018. If you push that first RMD into the following year, you will have two RMDs in that taxable year.
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Old 11-12-2016, 05:53 AM   #6
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Well that pretty much settles it. It will be during 2017 that she will be taking the first withdrawl. I don't think we will wait to take 2 in 2018. It will affect taxes more than we want.
Thanks for all the clarification.

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