If you’re approaching age 73 (or 75, depending on your birth year), the IRS requires you to start taking Required Minimum Distributions (RMDs) from your retirement accounts. But what if you have multiple IRAs? Can you take the RMD from just one? Should you consolidate? What are the risks and benefits?

Let’s break it all down with clear explanations and real-world examples.

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What Is an RMD?

An RMD is the minimum amount you must withdraw annually from your tax-deferred retirement accounts once you reach a certain age. This includes:

• Traditional IRAs
• SEP IRAs
• SIMPLE IRAs
• 401(k), 403(b), and other employer-sponsored plans

Roth IRAs are exempt from RMDs during the original account holder’s lifetime.

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The General Rule for IRAs

If you have multiple traditional IRAs, the IRS allows you to:

• Calculate the RMD for each IRA separately, and then
• Take the total RMD from one or more of your IRAs (as long as they are all traditional IRAs).

This is called the IRA aggregation rule.

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Step-by-Step Example: Multiple IRAs

Let’s say you have the following accounts at age 73:

Account Type	Balance	RMD Factor (from IRS table)	RMD Amount
IRA #1	$200,000	26.5	$7,547
IRA #2	$150,000	26.5	$5,660
IRA #3	$100,000	26.5	$3,774

Total RMD:

$7,547 + $5,660 + $3,774 = $16,981

Your Options:

1. Take $16,981 from IRA #1 only.
2. Take $10,000 from IRA #1 and $6,981 from IRA #2.
3. Take the exact RMD from each account.

All are valid. The IRS only cares that you withdraw at least the total RMD across all your IRAs.

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❌ What You Cannot Do

You cannot aggregate RMDs across different types of plans. For example:

• You cannot take your 401(k) RMD from an IRA.
• You cannot take an inherited IRA RMD from your own IRA.

Each 401(k) or inherited IRA must have its own RMD taken separately.

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Should You Consolidate Your IRAs?

✅ Benefits of Consolidation:

• Simplifies RMD calculations — only one account to track.
• Reduces paperwork — fewer statements, fewer tax forms.
• Easier investment management — one portfolio to rebalance.
• Lower fees — some custodians charge per account.

❗ Considerations:

• Make sure you’re not consolidating inherited IRAs with your own — that’s not allowed.
• Check for surrender charges or fees if moving from annuity-based IRAs.
• Ensure the receiving custodian supports all your investment types.

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Example: Consolidating IRAs

Let’s say you have:

• IRA #1 at Fidelity: $100,000
• IRA #2 at Vanguard: $150,000
• IRA #3 at Schwab: $250,000

You decide to consolidate all into IRA #3 at Schwab.

Now, instead of calculating three separate RMDs, you calculate one:

Total Balance = 100,000 + 150,000 + 250,000 = $500,000
RMD Factor (age 73) = 26.5
RMD = 500,000 / 26.5 = $18,867.92

You can now take that full amount from your single Schwab IRA.

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Tax Tip: Timing Matters

• RMDs must be taken by December 31 each year.
• Your first RMD can be delayed until April 1 of the year after you turn 73, but then you’ll have to take two RMDs that year (which could bump you into a higher tax bracket).

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Pro Tip: Automate Your RMDs

Most custodians (like Fidelity, Vanguard, Schwab) allow you to:

• Set up automatic RMD withdrawals
• Choose monthly, quarterly, or annual distributions
• Withhold federal and state taxes automatically

This helps avoid penalties and simplifies your retirement income planning.

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⚠️ What Happens If You Miss an RMD?

The penalty used to be 50% of the missed amount, but as of recent tax law changes, it’s now 25%, and possibly as low as 10% if corrected promptly.

Still, it’s best to avoid the penalty altogether by planning ahead.

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Final Thoughts

Managing multiple IRAs doesn’t have to be complicated. The IRS gives you flexibility with RMDs — but only within the same account type. Consolidating your IRAs can make your life easier, reduce costs, and help you stay compliant.

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Key Takeaways:

• You can aggregate RMDs across traditional IRAs.
• You cannot aggregate RMDs across 401(k)s or inherited IRAs.
• Consolidating IRAs can simplify your financial life.
• Automate your RMDs to avoid penalties.

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