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Required minimum distribution rules generally apply to traditional IRAs, SEP and SIMPLE IRAs, and many employer defined-contribution plans.
More key points
- An owner’s Roth IRA and designated Roth plan account are not subject to lifetime RMDs under current federal law, but beneficiaries can have distribution requirements.
- RMDs are calculated and satisfied under account-specific rules, so an IRA withdrawal generally cannot satisfy a 401(k) RMD.
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A required minimum distribution (RMD) is the minimum amount an account owner or beneficiary must withdraw from certain tax-favored retirement accounts for a year. The rules depend on the account type, whether the person is the original owner or beneficiary, the owner’s age, employment status, plan terms, and in some cases the beneficiary category. The useful planning question is not simply “Do RMDs apply?” but “Which account has a distribution requirement, who must take it, and by what date?”
Account types that commonly have RMDs
| Account | General lifetime rule for original owner | Can another account’s withdrawal satisfy it? |
|---|---|---|
| Traditional IRA | Generally subject to RMDs beginning at the applicable required beginning date. | Traditional IRA RMDs may generally be aggregated across the owner’s IRAs and taken from one or more of those IRAs. |
| SEP IRA or SIMPLE IRA | Generally follows IRA RMD rules. | Aggregation is generally among the owner’s IRAs, subject to IRS rules. |
| 401(k), 403(b), governmental 457(b), or other covered employer plan | Generally subject to plan-specific RMD rules; the current-employer delay may be available for some plans while still working, if the plan permits and the person is not a more-than-5% owner. | Each plan’s RMD is generally calculated and paid from that plan; an IRA withdrawal does not satisfy a workplace plan’s RMD. |
| Owner’s Roth IRA | No lifetime RMD for the original owner under current federal law. | No owner lifetime RMD to satisfy; beneficiary rules apply after death. |
| Designated Roth account in an employer plan | No lifetime RMD for the original owner under current federal law. | Plan and beneficiary rules still matter after the owner’s death. |
| Inherited account | Distribution rules depend on the beneficiary, date of death, account type, and applicable transition rules. | Do not assume the original owner’s aggregation rule carries over to a beneficiary. |
Why IRA and employer-plan rules are easy to mix up
The IRA aggregation rule is a limited convenience: an owner generally computes the RMD for each eligible IRA, totals those IRA RMDs, and may withdraw the total from one or more of the owner’s IRAs. That does not let the owner use an IRA withdrawal to cover a 401(k) or 403(b) RMD. Employer plans generally require their own distribution, and two workplace plans should not be treated as interchangeable merely because they have the same owner.
An owner with multiple 403(b) accounts may have a special aggregation rule. Check the current IRS instructions and plan terms rather than extending the IRA rule to every account. A distribution that exceeds the RMD for one account does not automatically cure a shortfall in another account when aggregation is not permitted.
Calculating the amount
The common calculation is the account balance at the prior year-end divided by the applicable distribution-period factor from the IRS table. The table depends on the owner-beneficiary facts. The Uniform Lifetime Table is commonly used by owners; a different joint-life table may apply when a spouse is the sole beneficiary and more than ten years younger. Beneficiaries use rules and tables that depend on their status and the date the account owner died.
- Identify the person who owns the account and whether the person is an original owner, surviving spouse, or other beneficiary.
- Classify the account: IRA, employer plan, Roth account, or inherited account.
- Use the correct prior-year-end balance and current IRS distribution table or plan calculation.
- Determine whether the first distribution has a special deadline; later annual distributions are generally due by December 31.
- Review the plan document because an employer plan may require distributions earlier than the latest date allowed by tax law.
First RMD timing and tax treatment
Under current federal rules, the starting age is generally 73 for many account owners, with different treatment for certain individuals born before 1951 and future statutory changes for later birth years. An IRA owner’s first RMD may generally be delayed until April 1 of the year after the year the owner reaches the applicable starting age. Delaying means two RMDs can fall in that following tax year: the first by April 1 and the next by December 31. Employer plans may permit a later start for a still-working employee who is not a more-than-5% owner, but the plan document controls within the law.
Most taxable distributions are included in gross income except amounts representing after-tax basis or otherwise qualifying for tax-free treatment. Failure to withdraw enough can trigger an excise tax, subject to the current statutory rate and correction rules. The tax result and due date should be checked for the specific year and account; do not rely on an old age table, divisor, or penalty percentage.
Exam traps
- Treating Roth IRA owner rules as if they also describe inherited Roth IRAs.
- Using a traditional IRA distribution to meet a 401(k) RMD.
- Assuming the current-employer delay applies to every retirement account or every plan participant.
- Forgetting that the first-year April 1 option can create two taxable distributions in one year.
- Applying the owner’s table or aggregation rule to a beneficiary without checking beneficiary rules.
Key takeaway
Classify the account and the taxpayer before calculating an RMD. IRA aggregation is narrow, workplace-plan distributions generally remain plan-specific, and Roth owner rules differ from beneficiary rules. Confirm current-year thresholds, tables, deadlines, and plan terms before advising a client.
Common questions
Can a traditional IRA distribution satisfy a 401(k) RMD?
Generally, no. The IRA and employer plan have separate RMD obligations; a distribution from one does not ordinarily satisfy the other.
Does the original owner of a Roth IRA have to take RMDs?
No lifetime RMD is generally required from the owner’s Roth IRA under current federal law. Beneficiaries may have distribution requirements after the owner dies.
Can an IRA owner take all IRA RMDs from one IRA?
Generally, the owner may total RMDs for eligible IRAs and withdraw that amount from one or more of those IRAs. This rule does not extend to all workplace plans.