Required Minimum Distributions-Combining Accounts


Combining RMDs Must Be Limited to the Same Type of Retirement Plan

If you have mul­ti­ple retire­ment accounts, you are allowed to com­bine and with­draw the mul­ti­ple RMDs from one retire­ment account; how­ev­er, only RMDs from cer­tain types of retire­ment plans can be com­bined. The fol­low­ing com­bi­na­tions are per­mit­ted:

  • If you have mul­ti­ple Tra­di­tion­al IRAs, you may cal­cu­late each IRA’s RMD, com­bine these RMDs, and with­draw the total amount from one Tra­di­tion­al IRA.
  • If you have mul­ti­ple 403(b) accounts, you may cal­cu­late each 403(b)‘s RMD, com­bine all these RMD amounts, and with­draw the total amount from one 403(b).
  • If you have mul­ti­ple inherited/beneficiary IRAs from the same dece­dent, you may choose to com­bine life-expectan­cy dis­tri­b­u­tions for those inher­it­ed IRAs and with­draw the total from one inher­it­ed IRA.

You may not com­bine the RMD amount for dif­fer­ent types of retire­ment plans. The fol­low­ing are exam­ples of com­bi­na­tions that are not per­mit­ted :

  • You may not com­bine the RMDs for mul­ti­ple qual­i­fied plans. Each RMD must be with­drawn from the respec­tive qual­i­fied plan.
  • You may not com­bine RMD amounts for dif­fer­ent types of plans. For instance, an RMD amount for a 403(b) account may not be with­drawn from a Tra­di­tion­al IRA or vice ver­sa, and the RMD for a 403(b) account may not be with­drawn from a qual­i­fied plan.
  • RMD amounts for inherited/beneficiary IRAs may not be with­drawn from Tra­di­tion­al IRAs that you own

Exam­ple 

Bri­an inher­it­ed an IRA from his father Tom. The RMD amount for the inher­it­ed IRA is $12,000. Bri­an has his own IRA that he fund­ed him­self with con­tri­bu­tions from eran­ings and rollover con­tri­bu­tions, and this year the RMD amount for his own IRA is $20,000. Bri­an can­not com­bine the two RMD amounts and with­draw from only one. Each RMD must be with­drawn from its respec­tive account because an inher­it­ed IRA and a con­trib­u­to­ry (or rollover IRA) are con­sid­ered dif­fer­ent types of plans.

In fact, if Bri­an had inherirt­ed an IRA from his dad and also from his mom, you may not com­bine dis­tri­b­u­tions for those inher­it­ed IRAs (sim­i­lar to the rule for muti­ple qual­i­fied accounts)


If you err in com­bin­ing RMD amounts for dif­fer­ent types of retire­ment plans, an RMD defi­cien­cy will result for the retire­ment plan from which you with­drew no RMD. For instance, say the RMD for your qual­i­fied plan is $20,000 and the RMD for your Tra­di­tion­al IRA is $10,000. If you with­draw $30,000 from the Tra­di­tion­al IRA and make no with­draw­al from the qual­i­fied plan account, you will not have sat­is­fied the RMD for your qual­i­fied plan account and will owe the IRS an excise tax amount of $10,000 (50% of the short­fall).

Aggre­ga­tion of RMDs
If you par­tic­i­pate in more than one qual­i­fied plan, your RMD for each plan must be deter­mined sep­a­rate­ly, and each applic­a­ble amount must be dis­trib­uted from the respec­tive plan. RMD amounts for qual­i­fied plans can­not be dis­trib­uted from IRAs and vice ver­sa. How­ev­er, if you own mul­ti­ple IRAs or mul­ti­ple 403(b) amounts, you may aggre­gate the RMD for all sim­i­lar plans (Tra­di­tion­al IRAs or 403(b)) and then take the amount from one account of each type of plan. 
 

Exam­ple
Bri­an, age 72, has two con­trib­u­to­ry IRAs and two 403(b) accounts. Bri­an also has assets in a ex-employ­er qual­i­fied plan and a 401k plan with a past employ­er. The RMD amount for each of Bri­an’s retire­ment accounts is the fol­low­ing:

IRA No.1 -$15,000
IRA No.2 — $8,000
403(b) No.1 — $6,000
403(b) No.2 — $4,500
Prof­it shar­ing account — $10,000
401(k) account — $12,000

Here are Bri­an’s options for his var­i­ous accounts:

  • For IRA No.1 and IRA No.2, Bri­an may either dis­trib­ute the amount from each IRA or total the amount and dis­trib­ute it from one IRA.
  • For 403(b) No.1 and 403(b) No.2, Bri­an may either dis­trib­ute the amount from each 403(b) account or total the amount and dis­trib­ute it from one 403(b) account.
  • The amount of $10,000 must be dis­trib­uted from the prof­it shar­ing plan account and the amount of $4,500 must be dis­trib­uted from the 401(k) account. These amounts can­not be com­bined.