Ask a Fool: Do I Need to Take My Required Minimum Distribution From All of My Tax-Deferred Accounts?

Q: 2019 is the first year I need to take a required minimum distribution (RMD). I have a total of three 401(k)s and an IRA. Do I need to withdraw from each account? And do I need to take all of the RMD at once?

You can choose whether to take your RMD as a series of smaller withdrawals throughout the year, or as a lump sum. Let’s say that you’re required to withdraw $24,000 this year. If it would be more convenient to set an automatic withdrawal of $2,000 per month, that’s perfectly fine to do.

Second, your RMD is based on your total balance in your tax-deferred retirement accounts. The IRS doesn’t care if you divide your RMD proportionally between all of your accounts or just pull it all from one, which is generally the easier way to go. In other words, if you’d like to withdraw your entire RMD from your IRA and leave your 401(k)s alone, that’s fine, provided that you have enough money in that account to cover the withdrawal.

Your RMD is based on your accounts’ value as of Dec. 31 of the previous year and is calculated based on IRS life expectancy tables. As long as the required amount of money leaves your tax-deferred investment accounts by the end of the year, it doesn’t matter which specific accounts you withdrew it from or how frequently you took distributions during the year.

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