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I know traditional IRA's have minimum required distributions--and I believe 401(k)'s do also. Would it be possible to take a MRD and pay tax on it and put the remainder into a Roth IRA? (Or do you have to have income to match it?)

Thanks in advance.

--SirTas
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SirTas asks,

I know traditional IRA's have minimum required distributions--and I believe 401(k)'s do also. Would it be possible to take a MRD and pay tax on it and put the remainder into a Roth IRA? (Or do you have to have income to match it?)


You must have "earned income" (i.e., wage and salary income) to fund a Roth.

intercst
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Sir Tas: I know traditional IRA's have minimum required distributions--and I believe 401(k)'s do also. Would it be possible to take a MRD and pay tax on it and put the remainder into a Roth IRA? (Or do you have to have income to match it?)


It depends on what you mean by remainder.

Amounts taken out for MRDs are permanantly withdrawn from tax deferred accounts, so if by remainder you meant the balance withdrawn from the MRD over the withholding you could not put that into the Roth. However, balances withdrawn above the MRDs could be transfered as conversions to Roth so that remainder is eligible. (Distributions from employer plans must first be rolled over to regular IRAs befor being moved into Roths-again, only the amount above the MRD is available for rollover.

Bill
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