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Conversion to ROTH

By Terry Savage on May 22, 2020 | Financial Planning / Retirement

Okay, let’s try this. I’m 71 years old and I have already received (1) one Required Minimum Distribution from my 457 account in 2019. I am scheduled to receive my RMD for 2020 in October.
Under the new CARES Act I am able to cancel my RMD for 2020. My question is; If I forgo the RMD for 2020 am I able to withdraw money from my 457 and convert it to a ROTH IRA? I would pay any taxes due on the withdrawal/conversion from cash on hand. Any guidance you can give me would be greatly appreciated.

Terry Says

That is basically the subject of next week’s column, which will be posted soon!
But two things: First, if you took your 2020 RMD in JANUARY 2020, you cannot return it! Just a weird quirk in the rules that says any RMDs taken after Feb 1st can be returned. Experts are hoping that will be revised in subsequent legislation. And if they withheld taxes (assuming you did your RMD after Feb !) you can’t get them back — but they will apply to next year’s tax liability.

Second, this once-a-year rollover limitation applies only from IRA to IRS, or Roth to Roth.
Rollovers from traditional plans such as 40l(k), 403(b) or 457 TO AN IRA do not have that
limitation. So go right ahead — but wait a few days for my column re details!

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