Are you getting close to retirement or have you already retired? If so, it’s likely you have more than one retirement plan.
You’re not alone. Many investors have multiple retirement plans; unfortunately they believe that having several plans makes it difficult to calculate required minimum distributions (RMDs). That needn’t be the case.
Say that in addition to several Individual Retirement Accounts (IRAs) you have a 401(k) plan and a 403(b) plan, all of which are still with the firms that initially handled the investments for your employers.
In this situation, you would be required to take three RMDs at age 70½: one RMD from each of your three separate pools of money. The first pool would be your 401(k) money; the second, your 403(b) money and the third your IRA money.
If you have multiple IRAs, once you have determined your total IRA RMD you can choose to withdraw the total IRA RMD from one or any combination of your IRAs. Similarly, if you have multiple 403(b) accounts, once you have determined your total 403(b) RMD you can choose to withdraw the total 403(b) RMD from one or any combination of your 403(b) accounts.
These points may need clarification, and tax laws are always changing; consult your advisor before taking RMDs from your retirement account.
This article is not intended to provide tax or legal advice and should not be relied upon as such. Any specific tax or legal questions concerning the matters described in this article should be discussed with your tax or legal advisor.