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Subject:  Re: 403b Required Distributions Date:  9/24/2012  10:58 AM
Author:  Hawkwin Number:  24943 of 26309

MIL has a couple of years before she hits 70 1/2. She works at a university and asked me recently what I thought she should do once she is forced to start taking minimum distributions from her 403b retirement plan.

I am pretty sure that some 403B plans allow you to defer RMD while you remain employed. I encourage you to help her find out by viewing her Summary Plan Description.

Is there any way to put off taking the hit on taxes? I am fairly certain that she cant roll over distributions into an IRA, etc, especially as I believe they are above all the limits for traditional IRA anyway. She is already maxing out her 403b.

There is no way to minimize the tax hit if she has to take the RMD (beyond create other unecessary deductions like extra charitable contributions). Rolling it to an IRA won't change anything - and she absolutely has to take RMD from an IRA. Rollovers are not the same as contributions so her ability to roll it is not restricted by her current income. Many if not most employers allow you to roll out of your current plan, even while working, at age 59 1/2 or 65.

My recommendation is for her to seek the advice of a tax professional. She might even benefit from converting some from her 403b to a Roth but that is a question that would take a lot more information.
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