ComplianceTax & AccountingNovember 20, 2019

IRA required minimum distributions and aggregation


The required minimum distribution (RMD) aggregation rule applies to individual retirement accounts (IRAs) that require an annual distribution. Traditional, simplified employee pension (SEP), and Savings Incentive Match Plan for Small Employers (SIMPLE) IRAs are all subject to the RMD rules, but Roth IRAs are not. An individual who owns an IRA that is subject to the RMD rules must begin taking distributions by April 1 of the year following the year he/she attains age 70½.

RMDs and Employer Plans

With a few variations to the IRA RMD rules, employer plans are also subject to the RMD rules. As a matter of fact, the RMD rules are written for qualified employer plans and their participants and beneficiaries but apply to IRA owners and IRA beneficiaries. Employer plan RMDs must begin by April 1 of the year after the plan participant attains age 70½, or for an individual who is still employed and not a more than 5 percent owner, April 1 of the year after he/she retires.

Multiple IRAs

It is common for individuals to own multiple IRAs, with each generally being held with different IRA custodians/trustees. A custodian/trustee that holds an IRA with a reportable balance on December 31 must calculate the RMD applicable to that IRA for the following year and report it to the IRA owner or offer to calculate the RMD upon request by the IRA owner.

If an IRA owner has more than one IRA, the applicable RMD for each is generally taken from the IRA to which the RMD applies, however, the RMD amounts may be aggregated and taken from any one (or more) of the IRAs.


George, age 73, has a traditional IRA at ABC Bank and another traditional IRA at XYZ Credit Union. The RMD for each IRA is $5,000. If George takes a $10,000 distribution from his IRA at ABC Bank, the distribution satisfies the RMD for both IRAs.

Aggregation and Other Accounts

The RMD aggregation rule is specific to IRAs. In other words, if an individual has an RMD requirement from his/her employer plan, the RMD must be taken from that specific employer plan (i.e., cannot be aggregated with an IRA). Furthermore, if an IRA owner is also the beneficiary of another individual’s IRA requiring an RMD (i.e., death distribution) it must be satisfied separately. A beneficiary RMD must be distributed from the beneficiary IRA. If an individual is the beneficiary of multiple IRAs of the same decedent, the RMDs may be aggregated in certain situations. Thus, traditional, SEP, or SIMPLE IRA RMDs can be aggregated and taken from one or more of the individual’s IRAs, however the individual’s employer plan RMD and beneficiary IRA RMD must be satisfied separately.


George is a retired participant in a 401(k) plan and has an RMD to take. George is the beneficiary of his deceased brother John’s traditional beneficiary IRA from which an RMD is required. George also owns two traditional IRAs from which he must take an RMD. Finally, George owns a Roth IRA.

George must take his employer plan RMD from the 401(k) plan. He must take his beneficiary RMD as a death distribution from the beneficiary IRA. George may aggregate RMDs from his two personal traditional IRAs and take the aggregated RMD amount from either, or both, of the IRAs. The Roth IRA does not have an RMD and distributions from it cannot be used to satisfy George’s traditional IRA RMD.


An IRA owner should seek advice from his/her tax professional to determine it if would be beneficial to utilize RMD aggregation rules to deplete a specific IRA or investments within the IRA before taking RMDs from a separate IRA. For more information on the RMDs, see the IRA Required Minimum Distribution Not Satisfied: Penalty and Penalty Waiver Request article posted earlier this year.

For an opportunity to learn more about IRAs and other tax-advantaged accounts including Health Savings Accounts and Coverdell Education Savings Accounts, consider our on-demand video training offered on a variety of topics. Go here to learn more about training opportunities available to you, or call us at 1-800-552-9408.
Diana Theis
Senior Specialized Consultant, Tax Advantaged Accounts
With more than 30 years of experience, Diana has worked closely with hundreds of financial organizations to help them create, implement, and maintain their tax-advantaged accounts program.