All Qualified Accounts
When your initial RMD is due either in the year in which you turn 70.5, or by April 1 of the year following when you turn 70.5, it’s my understanding that you can add up all of your IRA’s and 401k’s…and then use the life expectancy table ( 26.5 for a 71 year old )divide that into 100….get 3.77% and take this percentage of your entire qualified money as a distribution. Further, you can take the distribution from any qualified account, as long as it’s equal to 3.77% of your total qualified money.
Is this correct?
Permalink Submitted by Alan - IRA critic on Thu, 2013-03-21 21:27
No. You can do that (known as aggregation) for owned IRA accounts, but each 401k account must individually distribute it’s own RMD amount. Also, the more direct way to calculate the RMD and avoid rounding differences is just to divide the prior year end balance by 26.5.
Permalink Submitted by Mel Langer on Fri, 2013-03-22 20:57
Sincere thanks to Alan for clarification about aggregation, not to be confused with “aggravation”, which is what happens when you listen to financial planners and “IRA Experts” who tell you that it is ok to aggregate all qualified accounts and take a distribution from any one. I have since checked the IRS website which confirms exactly what Alan stated. I think that Alan is really Ed Slott in disguise. That’s a compliment because Alan is always right on the money, and an absolute credit to this forum.
Permalink Submitted by tomd37 on Fri, 2013-03-22 23:13
Alan is a highly dedicated individual who has participated in many forums similar to this one. His dedicated participation is highly appreciated by literally thousands of individuals, including myself. Thank you very much Alan for all you have done in the various forums, you have enriched our lives and understanding of many different subjects.