At 74 He Can Roll His Three IRAs Into His Employer’s 401(k). As Long as He Still Clocks In, the IRS Can’t Ask Him for a Dollar From Any of Them

If you are still on the payroll in your seventies and have money scattered across old IRAs and a former employer’s 401(k), your current plan may be hiding a shelter you have not yet used. Under the still-working exception, required minimum distributions from your current employer’s 401(k) can wait until you actually retire. IRAs do not get that deferral on their own. But if you roll them into the plan where you still clock in, they can inherit it.

That is the move a 74-year-old with three IRAs can execute: consolidate the outside pre-tax money into the current employer’s plan, and the whole combined balance falls under the same deferral until separation from service. Once the money moves in, it becomes part of that plan and plays by the plan’s rules.

Do This One Thing Before You Move a Dollar

Here is the trap that ruins the entire play, and you must handle it first. A required minimum distribution is not eligible to be rolled over. If you are already past age 73, that year’s RMD must come out of the IRA before the remaining balance is rolled into the 401(k). Rolling first and pulling the RMD out of the plan later does not work, and the IRS does not grant exceptions for sequencing mistakes.

If you accidentally sweep the RMD into the plan, the amount is treated as an excess contribution in the receiving plan, subject to its own correction procedure and a 6% excise tax under IRC §4973 for every year it remains uncorrected. This is the single most common way the strategy is botched. The sequence is not negotiable: distribute first, then roll second, every time.

Three Conditions That All Have to Hold

The shelter lives in IRC §401(a)(9)(C), which lets a non-owner employee delay RMDs from the current employer’s plan until April 1 of the year after retirement. For outside money to get the same treatment, three separate permissions have to align.

First, the plan must have adopted the still-working exception. It is permitted, not required, and some plans force RMDs at 73 regardless of employment status. Second, the plan must accept incoming rollovers, which is also a plan-level choice. Accepting rollovers from other 401(k)s does not automatically extend to IRAs; those are separate permissions in the plan document, and some plans allow one but not the other.

Third, only pre-tax IRA dollars generally roll in. After-tax basis from non-deductible contributions typically stays behind, which matters if you ever filed Form 8606. The participant also cannot own more than 5% of the sponsoring business, which is a disqualifying threshold tested in the plan year you reach your RMD age.

Backdoor Roth Angle Most People Miss

The RMD deferral is only part of the prize. The pro-rata rule under IRC §408(d)(2) that determines how much of a Roth conversion is taxable looks at your aggregate IRA balance on December 31 of the conversion year. Employer plan balances are excluded from that calculation entirely.

Move the pre-tax IRA money into the 401(k) before December 31, and the pro-rata denominator collapses to the remaining after-tax basis, opening a clean backdoor Roth path in future years. Miss December 31 and the benefit does not apply to that tax year.

What You Give Up by Moving It In

Plan investment menus are narrower than an IRA brokerage window, and expense ratios can run higher. Price the fund lineup before you move. Qualified charitable distributions under IRC §408(d)(8) can only come from an IRA, so a charitably inclined retiree loses that lever on every dollar rolled into the plan. For 2026, the annual QCD limit is $111,000 per person (per IRS Notice 2025-67), which is a meaningful ceiling for donors who use that tool to satisfy RMDs and keep those dollars out of adjusted gross income.

In-service distribution options inside a 401(k) are also usually more restrictive, and unwinding the move while still employed is difficult. On the other side, ERISA plans carry broader federal creditor protection than IRAs, and for some participants that protection alone justifies the consolidation.

Retirement Day Restarts the Clock on Everything

Once employment ends, the first RMD from the plan is due by April 1 of the following year. Deferring that first payment into April pushes two RMDs into the same tax year, because the second distribution is due by December 31 of that same year. The entire consolidated balance is now the base for both calculations.

The deferral ends all at once on a larger number, so the tax-year impact deserves careful modeling well in advance, not a discovery at tax time. We walked through how to defuse that first-year tax bomb in a free guide here.

Before initiating anything, ask the plan administrator two questions: does the plan adopt the still-working exception, and does it accept direct rollovers from traditional IRAs? Then take one distribution first, the current year’s RMD out of the IRA, and only after that move the rest.

Editor’s note: This article corrects the IRC citation for the pro-rata rule on Roth conversions from the erroneous “§7408(d)(2)” to the correct §408(d)(2), and adds the 2026 qualified charitable distribution annual limit of $111,000 per person (IRS Notice 2025-67) to the tradeoffs section.

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