Thank you for your marvelous column, I have learned so much from you. I have now reached the magical 70-1/2 point in my life and need your help with the RMDs. I know I can bundle all my various IRA accounts’ RMDs and take them from one account if I chose to do so. However, I also have two different 401(ks) and one 403(B), can I take these out of an IRA account as well, or do they have to come out of 401(k) and 403(B) accounts? Thank you.
SAVAGE SAYS: You have to total the value of ALL your retirement accounts to determine the RMD — and then can take it from one or more accounts. BUT, I’m definitely going to recommend that you ROLL any remaining employer plans (such as 40l(k) or 403(b) ) into an IRA Rollover. There are two reasons for this. First a rollover account at a major mutual fund company (Fidelity, Vanguard, T. Rowe Price) will give you a better choice of investment options. And second, this will facilitate distributions to your heirs, who can then stretch out growth of remaining IRA assets. Many company plans are not set up to do this. Also, it will make it far easier to calculate your RMD. But keep this rollover IRA separate from any other IRAs you may have started over the years.