Question: James retired and turned 70 1/2 on May 12, 2011. He had several different types of retirement accounts that he had contributed to over the years. His IRA and 401(k) accounts had roughly the same value as of the beginning of the year and his SEP IRA had about half of the value. James understands that he must start taking the required minimum distributions (RMD) from these accounts as he has reached the required beginning date. His IRA is invested in riskier investments and he would like to drain this one faster than the 401(k) and SEP IRA. Can he satisfy his RMD requirements by combining the RMDs of the three separate accounts and taking the money out of his IRA only?

Answer: According to Reg. §1.401(a)(9)-8, a taxpayer must have a separate determination of the RMD from each of his employer retirement plans (401(k), profit sharing, defined benefit plan, etc.). Each of these RMDs must be taken from the respective accounts. IRAs, however are a different story. The IRAs (including SEP and SIMPLE IRAs) must also have each separate RMD calculated, but Reg. §1.408-8 allows the taxpayer to aggregate the RMDs and draw them out of a single IRA or combination of the IRAs. So, in James's case, the RMD from the 401(k) must be taken from the 401(k) account, but the IRA and SEP IRA RMDs can be taken out of either account or a combination of both accounts.