Born March 1952 When to take RMD?

[copyright1997reloaded]

Is that accurate? I thought that the total RMD amount for all accounts could come out of just one account.

You are correct.

 

[oldtimer]

Is that accurate? I thought that the total RMD amount for all accounts could come out of just one account.

That is true for like accounts. Total RMDs for IRAs can be taken from a single IRA. But 401k account must take its own RMD, can't be taken from your IRA.
Of course you have the option to rollover the 401k into your IRA and starting the following year can take a single RMD from the IRA.

 

[marko]

One last question with RMD creeping up on me next year:

How does the IRS know what your total IRA/401k balance is in order to calculate if you're taking out enough? Some folks may have 2, 3 or 4 IRAs etc. Do they add them all up somehow?

 

[cathy63]

One last question with RMD creeping up on me next year:

How does the IRS know what your total IRA/401k balance is in order to calculate if you're taking out enough? Some folks may have 2, 3 or 4 IRAs etc. Do they add them all up somehow?

Each IRA custodian sends a 5498 to the IRS in May for each account they hold. Box 5 is the FMV of the account and box 12 is the RMD. You have to take the total of all forms box 12 from your accounts. It can all be from one IRA or divided out amongst them any way you like.

401(k) accounts are handled differently. I don't think there's an individual report like there is for IRAs. Instead the plan administrator is responsible for calculating and handling distributions and filing reports on the overall plan each year. If the plan is audited by the IRS, the administrators would have to demonstrate that they did this correctly and take the appropriate corrective action if they didn't.

 

[marko]

Each IRA custodian sends a 5498 to the IRS in May for each account they hold. Box 5 is the FMV of the account and box 12 is the RMD. You have to take the total of all forms box 12 from your accounts. It can all be from one IRA or divided out amongst them any way you like.

401(k) accounts are handled differently. I don't think there's an individual report like there is for IRAs. Instead the plan administrator is responsible for calculating and handling distributions and filing reports on the overall plan each year. If the plan is audited by the IRS, the administrators would have to demonstrate that they did this correctly and take the appropriate corrective action if they didn't.

Thanks. Once again you're the best, Cathy!

 

[marko]

So, various RMD calculators list out what I should have to withdraw on year 1, along with detail showing a bit more to be withdrawn in each following year.

In following years do I use the numbers from my first calculation or do I restart and calculate each new year as "year one"?

 

[audreyh1]

“Restart”: You have to calculate this each year as your minimum required amount is based on the prior year Dec 31 value of all IRAs summed together as well as your age.

RMD has no relationship to SWR rules. So don’t mix them up.

 

[jazz4cash]

So, various RMD calculators list out what I should have to withdraw on year 1, along with detail showing a bit more to be withdrawn in each following year.

In following years do I use the numbers from my first calculation or do I restart and calculate each new year as "year one"?

Each year you will use the prior year end balance to calculate your RMD. The RMD percentage rises smoothly from year to year but if your balance jumps (or drops) significantly, your RMD withdrawal amount will jump (or drop) also. See Cathy63’s post above that describes form 5498 procedure.

 

[cathy63]

So, various RMD calculators list out what I should have to withdraw on year 1, along with detail showing a bit more to be withdrawn in each following year.

In following years do I use the numbers from my first calculation or do I restart and calculate each new year as "year one"?

You don't have to do the math yourself. Your IRA custodians are required to tell you how much your required RMD is every year. They can do it on your December or January statement or by sending you a letter or a copy of the 5498. If you have multiple IRAs, you just need to make sure you get the RMD amounts for each one and add them together.

 

[marko]

You don't have to do the math yourself. Your IRA custodians are required to tell you how much your required RMD is every year. They can do it on your December or January statement or by sending you a letter or a copy of the 5498. If you have multiple IRAs, you just need to make sure you get the RMD amounts for each one and add them together.

Thanks! Doing the math --any math--myself is most often a really, really bad idea.