GETTING STARTED An IRA Owner's Manual Max Out Your 401(k) What to Ask Before Buying an Annuity How Much Will Social Security Pay You? MORE... Sponsored By: RETIREMENT TOOLS Am I saving enough for retirement? How much will Social Security provide after retirement? The power of boosting 401(k) contributions Recent Columns Going Into Overtime - Feb. 3, 2005 Don't Delay Starting Your HSA - Jan. 31, 2005 Stocks Still Tops for the Long Term - Jan. 27, 2005 'One for All' Works for IRAs, Too - Jan. 24, 2005 Get Out of Bankrupt Shares While You Can - Jan. 20, 2005 Insuring a Car You Don't Own - Jan. 17, 2005 MORE ... ASK KIM E-MAIL   Sign Up   Now you can have Ask Kim delivered to your inbox three times a week. Sign up now.

ASK KIM
'One for All' Works for IRAs, Too
by Kimberly Lankford

I have several IRAs. Can I satisfy the minimum distribution requirement from only one IRA, or do I have to take money from each account?

When it comes time to take required distributions from your traditional IRA, think about The Three Musketeers: All for one and one for all. You'll need to calculate your required minimum distribution from all your IRAs, but you can take the money from whichever one, or any combination, you want.

You'll need to take your first required distribution by April 1 the year after the year you turn age 70½. After that, you must take your annual withdrawals by December 31 of that calendar year.

For example, if your 70th birthday was January 24, 2004, you turned 70½ on July 24, and must take your first withdrawal by April 1, 2005. But if you wait until then to take your first withdrawal, you'll have to take a second withdrawal -- for 2005 -- by December 31, 2005. And remember, traditional IRA withdrawals are taxed as income, so two withdrawals means a double tax bite.

The IRS wants you to withdraw all of your traditional IRA money over your lifetime, so your minimum distribution requirements are based on your life expectancy each year.

For help calculating your required minimum distribution, see our required minimum distribution calculator or Table 3 on page 95 of IRS Publication 590, Individual Retirement Arrangements.

These rules only apply to traditional IRAs; Roth IRAs don't have any distribution requirements.