RMDs, or Required Minimum Distributions have to be taken after you become 70 ½ if you have a retirement account such as an IRA or 401(k). To determine the amount you are required to take, the value of all of your retirement accounts have to be added together. If you have multiple retirement accounts you can take the RMD from only one account and leave the others alone … unless you have a 403(b) plan.
403(b) plan accounts must be added to the total of the retirement accounts to determine the RMD. But you can’t use distributions from IRAs to satisfy the RMDs from 403(b)s, nor can you use 403(b) distributions to satisfy IRA RMDs.
However, if you have several different 403(b) accounts, you can take the RMD from just one of the accounts, as long as it’s at least as much as the RMD based on the sum of all of the 403(b) accounts.
If you are retired, you may be able to simplify your life by rolling all of your retirement accounts into an IRA. That way you can eliminate a lot of confusion, and the potential penalties that go along with making a mistake.
If you have questions about retirement accounts, call us.