By Ian Berger, JD
IRA Analyst
Question:
I am 70 years old and do not have to start taking required minimum distributions (RMDs) for three years. Can I do a qualified charitable distribution (QCD) from my IRA now? Or, do I have to wait until age 73 when I have to start taking RMDs?
Elaine
Answer:
Hi Elaine,
You do not have to wait until age 73 to do a QCD, but you do have to wait until you reach 70½ (the date six calendar months after your 70th birthday).
Question:
Does the beneficiary of a 529 plan have to have earned income in order to transfer funds from his 529 account to his Roth IRA account? The 529 plan told me it is not required, but my son did some research that says that it is. I would appreciate some clarification.
Thanks,
Ray
Answer:
Hi Ray,
Your son is correct. A 529 beneficiary doing a Roth IRA rollover must have compensation in the year of the rollover that is at least equal to the amount being rolled over. The confusion may be because the income limitations on Roth IRA contributions don’t apply to these rollovers. A 529 beneficiary could do a 529-to-Roth IRA rollover even if she earns too much to make a Roth IRA contribution for that year.
If you have technical questions you would like to have answered, be sure to submit them to [email protected], to be answered on an upcoming Slott Report Mailbag, published every Thursday.