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Do the required minimum distribution rules apply only to traditional IRAs or also to 401(k)s? Do I combine my year-end sums of IRAs with my year-end sum in my 401(k) to calculate my required minimum distribution, or do I calculate each one separately?
The required minimum distribution rules apply to both traditional IRAs and 401(k)s. But you calculate the required amounts differently for each type of account.
You must start taking mandatory withdrawals by April 1 of the year after you turn 70½. However, you don't have to take distributions from a 401(k) if you're still working.
You calculate your required minimum distribution for IRAs by adding up the balance in all of your IRA accounts, including traditional IRAs as well as SEPs and SIMPLE IRAs (but not Roth IRAs), says Ed Slott, author of Your Complete Retirement Planning Road Map. Then you divide the total balance by the IRS's life-expectancy numbers for someone your age. You can find the numbers in IRS Publication 590 Individual Retirement Arrangements, or use our required minimum distribution calculator. You can take the withdrawals from any one or a combination of your IRAs (but not from Roth IRAs).
You must calculate the required minimum distribution for each 401(k) separately and then withdraw the required amount from each account -- even if you have several 401(k)s. You use the same life-expectancy figures as you do with IRAs.
For more information about calculating your required minimum withdrawals, see When to Take Required IRA Distributions.
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