RMD

[CharterArmsSouthpaw]

For purposes of calculating RMD amount, what is considered more than one account?

When I retired, I rolled my403b over to Vanguard in its entirety. That was then subdivided into a stock fund, a bond fund, and a mixed fund.

Is that considered one retirement acct or three?

thank you.  

[rjs]

You probably have one IRA that owns shares of three different mutual funds. One IRA can contain multiple investments, but the IRA is one account. If you're not sure, ask Vanguard.

[VolvoGirl]

IRA Distributions and RMD, see Pub 590B page 7

https://www.irs.gov/pub/irs-pdf/p590b.pdf

Each IRA plan might automatically send you a letter saying the RMD amount you need to take at the beginning of the year.  Mine did.  If they are the same kind of accounts like IRA you can take the total RMD for all of them from one account or split it up.  You have to take the RMD separately from IRA and 401k accounts.

Once you determine a separate required minimum distribution from each of your traditional IRAs, you can total these minimum amounts and take them from any one or more of your traditional IRAs.

See this IRS FAQ on RMDs….

http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Required-Minimum-Distributions

Here is a worksheet to calculate the RMD

https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf

[VolvoGirl]

Here is newer information......

Use this page to determine the RMD (for either age 70 1/2 or 72)

IRA Required Minimum Distribution Worksheet | Internal Revenue Service

The Table III in the link is in Appendix B at the very bottom of the long page (scroll way down).

[fanfare]

when you log into Vanguard it will show you how many accounts you have, if you are not sure.

In any case, as far as IRS is concerned, you have one IRA, even if various custodians have some portion.

@CharterArmsSouthpaw 

[CharterArmsSouthpaw]

Thank you for your reply. 

Yes, all my money is held at Vanguard, just in three different Vanguard funds. 

[Opus 17]

All IRA balances are aggregated to calculate the RMD, and the money may be withdrawn from any of the accounts or any combination.  Remember also, an RMD is not a specific, extra transaction, it is the amount you must withdraw over the year to satisfy the IRS.  For example, if your RMD is $5000 and you have already been withdrawing $500 per month for living expenses, you have already met your requirement for the year.

However, if you have money left in qualified workplace plans (401k, 403b, etc.), their RMDs are calculated separately from your IRA RMD.  

Also note that Roth IRAs don't have an RMD and the balance of a Roth IRA is not included with your pre-tax IRAs when calculating your RMD.

[CharterArmsSouthpaw]

Thank you.  That is very helpful. I didn’t realize that intermittent or regular withdrawals counted towards the RMD  requirement—I thought it had to be designated specifically. 

The Vanguard is everything. I rolled everything over because my former employer’s plan han very high fees, so I didn't want to leave money there. 

[dmertz]

Actually, the RMD for each IRA is calculated separately, then aggregated.  The general result for satisfying RMDs is the same, but it makes a difference if, say, you want to satisfy the RMD for one of the traditional IRAs and then do a Roth conversion from that IRA before satisfying the RMDs for the other IRAs.  The RMD for a particular IRA must be satisfied before any other amounts distributed from that IRA are eligible for rollover.

IRA RMDs can be aggregated with other IRA RMDs and 403(b) RMDs can aggregated with other 403(b) RMDs, but RMDs for other types of accounts are not permitted to be aggregated.

[Opus 17]

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@CharterArmsSouthpaw wrote:

Thank you.  That is very helpful. I didn’t realize that intermittent or regular withdrawals counted towards the RMD  requirement—I thought it had to be designated specifically. 

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Nope.  Over the course of the whole year, you are required to withdraw an amount equal to or more than the minimum, which is based on your account balance and your life expectancy, but it doesn't matter when you withdraw it.  You should always double check in December to see if any previous withdrawals covered the needed amount, since the actual final amount is based on your balance as of 12/31.

[fanfare]

"The RMD for a particular IRA must be satisfied before any other amounts distributed from that IRA are eligible for rollover."

Where does it say that?

You've always said the rule is that you can take (satisfy) RMD from any IRA account.

Or are you assuming the custodian is going to enforce this ?

some custodian might or might not ?

@dmertz 

[dmertz]

@fanfare , 26 CFR 1.408-8 Q&A-4.

IRA participants are the ones who must follow the law.  IRA custodians play no part in enforcing this.

[fanfare]

I think you are misreading that paragraph.

In fact, the last sentence provides the out needed to confirm the "rule" above.

@dmertz 

[dmertz]

@fanfare , I think you are misreading my post.  I did not say that the RMD for the particular IRA had to be completed from that IRA, only that the RMD had to be completed for that IRA, no matter what IRA that RMD was paid from.  For example, if your life expectancy factor is 25 and you have a previous year-end value of $50,000 in IRA A (RMD of $2,000) and $10,000 in IRA B (RMD of $400), you can satisfy IRA A's RMD with a $2,000 distribution from IRA B and then convert the entire IRA A to Roth.  You'll still have to complete the $400 RMD for IRA B by the deadline.

[fanfare]

OK ...

Of all IRA holders, how many  besides you and now me, are going to know of this arcane imperative and adhere to it?