The Internal Revenue Service (IRS) requires that you begin taking required minimum distributions (RMDs) from your retirement accounts after you reach age 72. That sounds simple enough, but unfortunately, calculating these distributions is sometimes tricky. While a tax professional can certainly help you with this, it’s a good idea to get to know the rules in order to avoid IRS penalties.

Below, we'll take a look at six key rules that can affect RMD calculations.

It's important to note that RMDs have been eliminated for the rest of 2020 as a result of the March 2020 passage of the $2 trillion CARES (Coronavirus Aid, Relief, and Economic Security) Act, meant to help Americans hit hard financially by the impact of COVID-19.

Key Takeaways

  • The first distribution from your IRA in any year is treated as part of your RMD for that year.
  • If you have several IRAs, you can combine the RMD amounts for each into one sum and take it from a single account.
  • Your account custodian is generally required to tell you that an RMD is due, but it doesn't have to calculate the amount for you.

1. RMD Sums: Not Rollover Eligible

Amounts representing RMDs must not be rolled over to an individual retirement account (IRA) or other eligible retirement plan and cannot be converted to a Roth IRA. If you roll over or convert your RMD, it will be treated as an excess contribution that must be removed from the account by a certain time in order to avoid taxes and penalties. 

Age 72

Starting in 2020, the RMD age has increased to 72, up from 70½.

The first distribution from your IRA for any year an RMD is due is considered to be part of your RMD for that year and is therefore not rollover eligible. “Be careful if you decide to roll an IRA over after the age of 72. Take your distribution first!” says Patrick Traverse, founder of MoneyCoach, located in the suburbs of Charleston, S.C.


Mary reaches age 72 in 2021. Her RMD for 2021 is calculated to be $15,000. As 2021 is the first RMD year for Mary, she may wait until April 1, 2022, to take her RMD distribution for 2021.

During 2021, Mary also received a regular distribution of $7,000 from her IRA. Even though Mary is not required to take her required RMD until April 1, 2022, the amount she received in 2021 cannot be rolled over, as it is first attributed to her RMD for 2021.

The rule states that any amount distributed during a year for which an RMD is due is considered to be part of the RMD until the full RMD amount has been distributed. If Mary had instead taken a distribution of $17,000, the amount in excess of the RMD amount (i.e., $2,000) would be rollover-eligible because her RMD for the year would already have been satisfied.

If you were married as of January 1, you are treated as married for the whole year for the purposes of RMD calculation. Even if your spouse dies or the two of you divorce before the year is out.

2. Aggregation of RMDs

If you participate in more than one qualified plan, such as a 401(k) and a 457(b), your RMD for each plan must be determined separately, and each applicable amount must be distributed from the respective type of plan.

RMD amounts for qualified plans cannot be distributed from IRAs and vice versa. However, if you own multiple IRAs or multiple 403(b) accounts, you may aggregate the RMD for all similar plans (traditional IRAs or 403(b)s), then take the amount from one account of each type of plan.


Sam, a 75-year-old retiree, has two traditional IRAs and two 403(b) accounts. Sam also has assets in a profit-sharing plan and a 401(k) plan with past employers. Let's say the RMD amount for each of Sam’s retirement accounts is the following:

  • IRA No. 1: $15,000
  • IRA No. 2: $8,000
  • 403(b) No. 1: $6,000
  • 403(b) No. 2: $4,500
  • Profit-sharing plan account: $10,000
  • 401(k) account: $12,000

Here are Sam’s options for his various accounts:

IRA No. 1 and IRA No. 2: Sam may either take each amount from each IRA account, total the amounts and take the money from one IRA, or take any portion of the combined amounts from each of the IRA accounts (as long as the total equals the full RMD requirement).

403(b) No. 1 and 403(b) No. 2: Sam may either take the amount from each 403(b) account, total the amounts and take that from one 403(b) account, or take any portion of the combined amounts from each of the 403(b) accounts (as long as the total equals the full RMD requirement).

The profit-sharing plan and 401(k): The amount of $10,000 must be distributed from the profit-sharing plan account, and the amount of $12,000 must be distributed from the 401(k) account. These amounts cannot be combined.

3. IRA Transfers in an RMD Year

You may transfer your entire IRA balance even if an RMD is due, provided you take the RMD from the receiving IRA by the applicable deadline. As the custodian of your new IRA may not know that the RMD associated with the old IRA is due, be sure you remember that it is and take it by the deadline. If you forget, you will face a 50% penalty. 

4. Death and Divorce and the RMD

If you were married as of January 1 of the year for which the calculation is being done, you are, for RMD calculation purposes, treated as married for the entire year, even if you divorce or your spouse dies later in that year.

That means if your spouse beneficiary is more than 10 years younger than you are, you may still use Table II in Appendix B of IRS Publication 590-B, titled “Joint Life and Last Survivor Expectancy.”

“Upon divorce, RMDs and retirement assets, in general, can become very tricky and can vary from state to state,” says Dan Stewart, CFA®, president of Revere Asset Management, Inc., in Dallas. “And community property states would have different rules than other states. So competent counsel is important, especially to avoid or minimize taxes.”

5. Family-Attribution Rule

An individual who owns more than 5% of a business is not allowed to delay beginning the RMD for a non-IRA retirement plan beyond April 1 of the year following the year they reach age 72, even if they are still employed.

If you own more than 5% of a business and your spouse or children are employed by the same business, your ownership may be attributed to them. This means they, too, might be considered owners and could be subject to the same deadline as you. 

6. IRA Custodian Reporting

Each year the custodians/trustees of your traditional IRA, SEP IRA, or SIMPLE IRA must send you an RMD notification if they held that account on December 31 of the preceding year. This notification must be sent to you by January 31 of the year for which the RMD applies.

Some custodians will include a calculation of your RMD amount for the year, while others will inform you that an RMD is due and only offer to compute the amount upon your request.

The Bottom Line

The six rules discussed here are certainly not exhaustive. If you have any questions about how to calculate or when to take your RMDs, it is worth consulting with a tax professional. Just remember that you could face a 50% penalty if you fail to comply with the rules.