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My sister is 75 and has been working in a full time job and collecting Social Security since she was 65.. Now this year she wants to stop working and she chose November 1st has her retirement date from her full time job. Now she is being told by her Income tax person that because she is retiring this year she has to take her full RMD out of her 459 (state employer 401k). Does that even sound right? She has to pull the full percentage out and pay taxes on it because she is retiring in November. If she had waiting until January this year would not be required to pull an RMD from the plan.

Does even sound right. With our money hungry government nothing would surprise me but this feels so unfair to her.

I appreciate any thoughts on how she could avoid this in any way other than having to go back through her HR department and basically start from scratch to change her retirement date to January.

Thanks in advance.
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https://www.irahelp.com/slottreport/still-working-and-past-a...
I believe that the information she has received is correct. She can wait until April 1 of next year to take it. That would mean that she would have two withdrawals next year.
You are correct that Uncle Sam want his pound of flesh. To help justify it remember that she has already delayed the RMD for four years.
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And no taxes have ever been paid on that RMD-eligible money.
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So lesson learned only retire in January or suffer the consequences? My point was she is contributing now up until her final paycheck yet she has to withdraw for this year because her retirement date is 2 months shy of the calendar year.

Seems rather harsh to me.
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Keep in mind that the RMD will be based on last years ending balance so this years contributions and gains will not be factored in an taxed. The RMD will reduce this years ending balance which will reduce next years RMD by a little bit.
I just don't seem to share you thoughts as to what is harsh or unfair.
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Depending upon current earnings, banked vacation pay, unused holiday pay, and the amount of RMD; you may discover that you have to pay a higher premium for Medicare Part B and Part D in two years.

That happened to me when I retired in 2013 because I emptied my 401(k) using a Net Unrealized Appreciation (NUA) withdrawal. At least, Social Security only penalized me for one year on the Medicare premiums.
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She can stop contributing to her state employer 401k at the end of August if she wishes.
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