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Old 10-05-2013, 10:19 AM
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Do IRAs and 403Bs have separate RMD requirements?

A few months ago, I helped my elderly father to complete his 2013 IRA Minimum Required Distribution from his four (4) IRAs. We did this by closing one of the smaller IRA accounts. That account balance was just slightly greater than the calculations (from the sum of the end of year balances from all 4 IRA accounts) showed that he needed to withdraw for 2013.

I have just discovered that one of the three (3) remaining IRAs is actually not an IRA at all. It is a 403b. Does the 403b have separate Minimum Required Distribution requirements that I must still meet? Or does our overall withdrawal for 2013 cover both his IRAs and this 403b?



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Old 10-06-2013, 08:31 AM
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Originally Posted by dmarshall View Post

#1;I have just discovered that one of the three (3) remaining IRAs is actually not an IRA at all. It is a 403b. Does the 403b have separate Minimum Required Distribution requirements that I must still meet?



#2;Or does our overall withdrawal for 2013 cover both his IRAs and this 403b?

#1;When you turn 70 1/2, you must start taking distributions from your 403(b) plan. The amount of the required withdrawal depends on the size of your 403(b) account and your age. The IRS publishes life expectancy tables that are used to calculate the amount of your withdrawal. Even though these withdrawals are required, you must still include them as part of your taxable income. The RMD rules apply to all employer sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans, and 457(b) plans. If the 403(b) plan has separately accounted and kept records for pre-1987 amounts, and is for the primary purpose of providing retirement benefits, then the pre-1987 amounts (excluding any earnings or gains on such amounts) are not subject to the age 70½ RMD rules and are not used in calculating age 70½ RMDs from the 403(b) plan, and don't need to be distributed from the plan until December 31 of the year in which a participant turns age 75 or, if later, April 1 of the calendar year immediately following the calendar year in which the participant retires.If the plan includes both pre-1987 and post 1987 amounts, for distributions of any amounts in excess of the age 70½ RMDs, the excess is considered to be from the pre-1987 amounts. If records are not kept for pre-1987 amounts, the entire account balance is subject to the age 70½ RMD rules of IRC.




#2;As mentioned above. You need to withdraw at least the required minimum distributio due for each of your tax-deferred accounts after age 70 1/2. Of course, you can always withdraw more money than the RMD amount, but then additional income taxes will be due. You may combine the RMD on any two accounts of "like structure;" i.e., the same type of retirement account. For example, two traditional IRAs can be combined, but it is not permitted to combine a traditional IRA and a a 403(b) plan for the purposes of a joint RMD.



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