Taking RMDs from Multiple Retirement Accounts

When you have multiple retirement accounts, the IRS doesn’t let you treat them all the same way for required minimum distributions. Taking RMDs from multiple accounts means understanding which accounts can be pooled and which must be withdrawn separately—a small mistake can cost you a 25% penalty on the shortfall.

The aggregation rule for traditional IRAs

The IRS lets you pool all your traditional IRAs into one pot for RMD purposes. If you have five traditional IRAs worth $100,000, $150,000, $50,000, $200,000, and $75,000, your total is $575,000. You calculate your RMD as a percentage of $575,000 (using your age and the IRS life-expectancy divisor), and you can take that entire amount from a single IRA—or split it across two or more, as you wish.

This is a genuine relief for people with multiple IRAs, especially those accumulated from old 401(k) rollovers or inherited accounts. You could take the full RMD from the smallest or most liquid account if the others are invested long-term.

One caveat: SEP IRAs and SIMPLE IRAs cannot be aggregated with traditional IRAs. If you have a SEP-IRA, it gets its own RMD calculation, separate from any traditional IRA you might own.

Employer plans are not aggregable

403(b), 401(k), and 457(b) plans each require a separate RMD from that specific plan. If you have a 403(b) from a school and a 457(b) from a city government, you must withdraw the RMD from each one in the same year. You cannot aggregate them, and you cannot satisfy the 403(b) RMD by taking extra from the 457(b).

The reason is that employer plans are held in trust by the employer, not by you directly, and the employer’s benefits department calculates and often facilitates the RMD. Each plan is a separate legal entity.

This means more paperwork and coordination—you need to ask each employer’s benefits office for their RMD calculation, confirm the amount, and ensure it’s withdrawn by year-end (or by April 1 following the year you turn the required age, for your first RMD).

Inherited IRAs and the one-deceased-owner rule

If you inherited a traditional IRA from your parent, the beneficiary RMD rules apply. You can aggregate inherited IRAs from the same deceased person and take one combined RMD. But if you inherited one IRA from your parent and another from your spouse, they are separate, and you must calculate and withdraw RMDs separately for each.

This rule can trip up blended families or people who inherited from multiple relatives. A widow who inherited both her late husband’s IRA and her late mother’s IRA must track two separate account balances and two separate RMD calculations.

Under current law (post-SECURE Act), non-spouse beneficiaries must empty most inherited IRAs by the end of the tenth year following the inheritance. This doesn’t mean you wait until year 10 and withdraw everything; instead, you take annual RMDs in years 1–10 based on your age and the original account owner’s age, and the balance must hit zero by December 31 of year 10.

Spouse beneficiaries and the rollover advantage

A spouse who inherits an IRA can roll it into their own traditional IRA or treat it as their own. Once rolled, the inherited account ceases to be “inherited” in the technical sense, and RMD rules change dramatically. If the surviving spouse is under age 73, no RMD is required on the rolled-over amount until the surviving spouse reaches 73. This is a major benefit and is why most financial advisors recommend that surviving spouses roll inherited IRAs into their own name.

Other beneficiaries do not have this option and must treat the account as inherited for RMD and distribution purposes.

What about Roth IRAs?

The original account owner of a Roth IRA is not required to take RMDs during their lifetime. However, beneficiaries of Roth IRAs must take RMDs after inheriting, and those RMDs follow the same aggregation rules as inherited traditional IRAs.

If you inherit a Roth IRA from your parent, the distributions are tax-free (assuming the account has been open at least five years), but you must still withdraw according to the schedule and face the same 25% penalty if you miss a withdrawal.

Employer plans with inherited benefits

If you inherited your spouse’s 403(b) or 401(k), you generally can roll it into your own IRA and treat it as your own, similar to the IRA rollover rule. Verify this with the plan administrator, as some plans are more restrictive. Non-spouse beneficiaries of employer plans cannot roll inherited 403(b) balances into their own IRAs and must take distributions from the inherited plan itself, spread over ten years (or subject to the plan’s specific rules).

Computing the RMD itself

The IRS publishes life-expectancy divisors based on your age at the end of the year. For an RMD from a traditional IRA at age 73, the divisor is roughly 26.5, meaning you divide your prior December 31 balance by 26.5 to get your RMD. At age 85 it’s roughly 15; at age 100 it’s roughly 6.

For inherited accounts, the calculation uses the original owner’s age and life expectancy, not yours, unless you are the surviving spouse (in which case you can treat it as your own and use your own age once rolled).

The penalty and small-account exception

Missing an RMD or taking too little triggers a penalty equal to 25% of the shortfall (reduced to 10% if corrected by year-end of the following year). For example, if your RMD was $10,000 and you took $7,000, the $3,000 shortfall is subject to a $750 penalty (25% of $3,000). The IRS allows some relief for good-faith errors if corrected promptly, but the safest approach is to calculate carefully and withdraw before December 31.

Some institutions offer RMD calculation services or automatic withdrawals tied to your calculated RMD, reducing the chance of error.

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