Legal Blog

The Weekly Scenario: Transferring Pre-Tax IRA Funds

Question: Is it possible to move my pre-tax IRA funds to my employer retirement plan (i.e., 401(k))?

Answer: The IRS permits an individual to transfer pre-tax IRA funds to an employer based retirement plan. However, the employer plan itself does need to allow for a transfer into the plan from an IRA. There is no requirement that the employer plan must offer this roll-in option.

 

Comment: For individuals still working who are closing in on 70 ½ and would be required to take minimum distributions from their IRA, this could be something worth considering. If permitted by the employer’s plan, the individual could move pre-tax IRA funds to the employer plan and thereby avoid taking minimum required distributions.

Moreover, if the individual is already past 70 ½, the strategy is still viable. However, the minimum required distribution for the year of the transfer would have to be taken from the IRA before the funds can be rolled in.

 

As always, if you have any questions or would like to learn more, please contact me.

ABOUT STEVE SHANE

Steve Shane Casual Small

sstane@offitkurman.com | 301.575.0313

Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.

 
 
 
 

ABOUT OFFIT KURMAN

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