MRD From Multiple IRAs?

[Gearhead Jim]

Surprisingly, I couldn't find my answer with the Search feature:

If a person has multiple IRAs, and must take MRDs; must the specified percentage be taken from each IRA? Or can you calculate the total required MRD and take it all from one IRA, leaving the other(s) untouched? A sort of rebalancing by distribution...

 

[ziggy29]

Surprisingly, I couldn't find my answer with the Search feature:

If a person has multiple IRAs, and must take MRDs; must the specified percentage be taken from each IRA? Or can you calculate the total required MRD and take it all from one IRA, leaving the other(s) untouched? A sort of rebalancing by distribution...

The IRS doesn't care where you take the RMDs or in which IRAs as long as you withdraw enough based on the cumulative value of the accounts at the end of the prior year. You could do it all from only one of the accounts if you want.

 

[Animorph]

I'm pretty sure the RMD is for all IRAs combined and you can take it from any of them anyway you want. Someone more resourceful will come up with a link I'm sure.

 

[ziggy29]

I'm pretty sure the RMD is for all IRAs combined and you can take it from any of them anyway you want. Someone more resourceful will come up with a link I'm sure.

https://personal.vanguard.com/us/insights/retirement/estimate-your-rmd-tool

If you have more than one retirement plan, you'll need to calculate the RMD of each plan separately. However, you may add the RMD amounts of all IRAs (including traditional, rollover, SIMPLE, and SEP-IRAs) and withdraw the total amount from any one or more of your IRAs. The same rules apply to 403(b) accounts.

 

[kaneohe]

I believe I've read that if you have beneficiary IRAs, you need to calculate and take the RMDs separately from those you own since you technically are the beneficiary and not the owner of those; if you've inherited from several sources, I think you also need to take the RMDs separately from each of the different sources.

RMD question: Why , for IRAs that you own, is it stated that you must calculate the RMDs separately, even though in the end you can take the total RMD from any or all of them? Why not just calculate the RMD as if they were
just one IRA?

Generally T1/D + T2/D + T3/D = (T1 + T2 + T3)/D
where Ti is the total value of an individual IRA account and D is the RMD divisor

 

[Gearhead Jim]

Thanks for the helpful answers

 

[Koolau]

RMD question: Why , for IRAs that you own, is it stated that you must calculate the RMDs separately, even though in the end you can take the total RMD from any or all of them? Why not just calculate the RMD as if they were
just one IRA?

I'm sure there is (or once was) a reason for it, but for our purposes, it's just a gummint rule we are forced to follow. Depending upon who reviewed your return at the IRS, you might get away with doing it the "wrong way" as long as you pay the right amount. However, if a reviewer were in a bad mood (or had been jumped recently about letting such an "important" infraction slide) you could be penalized. I'm sure there is a song somewhere with a line "Don't ask why..." (I would finish the line with "because we're the gummint - that's why.")

 

[kaneohe]

I'm sure there is (or once was) a reason for it, but for our purposes, it's just a gummint rule we are forced to follow. Depending upon who reviewed your return at the IRS, you might get away with doing it the "wrong way" as long as you pay the right amount. However, if a reviewer were in a bad mood (or had been jumped recently about letting such an "important" infraction slide) you could be penalized. I'm sure there is a song somewhere with a line "Don't ask why..." (I would finish the line with "because we're the gummint - that's why.")

Koolau, you are right .......there is a reason. I once learned it but when I posed that question, I knew there was a reason but had forgotten what it was.
The memory function is slow but apparently still exists so in the meantime I had finally re-discovered what the reason was. It doesn't apply to all (not to me also) but if you have a spouse 10 yrs? younger and she is beneficiary on your IRA , you get to use a different table to figure the RMD for that IRA. However, you might have other IRAs where someone else was beneficiary, so you would use the normal table. Thus 2 different divisors so you need to calculate each RMD separately and then add them up (or at least do the calculation in 2 groups and then add them up). I learned this from Alan S. at fairmark.com.

 

[Koolau]

It doesn't apply to all (not to me also) but if you have a spouse 10 yrs? younger and she is beneficiary on your IRA , you get to use a different table to figure the RMD for that IRA. However, you might have other IRAs where someone else was beneficiary, so you would use the normal table. Thus 2 different divisors so you need to calculate each RMD separately and then add them up (or at least do the calculation in 2 groups and then add them up). I learned this from Alan S. at fairmark.com.

Good info to know. Thanks! Now, if I can find that much younger woman (I married a much older woman - almost 3 months!!), I'll be prepared.

 

[kaneohe]