Personal Investment & Financial Planning Q`s/Required Minimum Distribution


I have a 401K account plus IRA accounts at 4 financial institutions.  I have reached 70 1/2 and must take the RMD.  I want to withdraw the total amount of my RMD required by adding the year end balances in the 401k and the amounts in the 4 financial institutions  in a lump sum from one account at a bank.  I do not want to withdraw any from the 401k.  However,the administrator of my 401k says I MUST take the RMD on the balance in my 401k and can then take the rest from the bank.  They say there must be an RMD withdrawal  from the 401k every year.  Is this true?   Must I take 1 withdrawal from the 401k and another from the bank.  (I want a single withdrawal but not from the 401k as the return on it is much better than the bank).

As far as the IRS is concerned, you do not need to withdraw from your 401(k) if you have another account or accounts from which you can withdraw the full amount of your total required minimum distribution.  The RMD amount required is calculated from the total of all tax-deferred qualified accounts.  As long as there is a total withdrawal from any combination of accounts sufficient to complete the RMD, you are fine.  Theoretically, the 401(k) custodian could have its own RMD requirement, but this would not be an IRS requirement, nor would this appear to make sense, as such a rule would reduce that company's assets under management.

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Rob Drury


Retirement planning, tax qualified retirement plans (401(K), IRAs, etc.), mutual funds, insurance used in retirement planning, estate planning (tax planning, transfer of assets, creditor protection).


Comprehensive financial planner, 14 years; Executive Director, Association of Christian Financial Advisors, the nation's largest nonprofit financial planning network. Financial writer and frequent contributor to journalists and media sources.

Association of Christian Financial Advisors (Executive Director), National Association of Insurance and Financial Advisors (NAIFA).

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