Aggregate or Not? RMDs Across 3 IRAs vs Two 401(k)s

The decision in one sentence

Two retirees with the same total balance face the same dollar RMD — but completely different rules about where the money has to come from. IRAs aggregate. Employer plans do not. Get that split wrong and the IRS bills you 25% of every dollar you should have withdrawn but didn’t, under IRC §4974.

Worked example: Margaret in Phoenix, age 73, single filer

Margaret turned 73 in 2026, so this is her first RMD year. She files single in Arizona. Her retirement money sits in five separate accounts, all funded with pre-tax dollars:

• Traditional IRA #1 (Schwab): $300,000 as of 12/31/2025
• Traditional IRA #2 (Fidelity): $400,000 as of 12/31/2025
• Traditional IRA #3 (Vanguard): $300,000 as of 12/31/2025
• Old 401(k) from Employer A (still at the plan): $250,000 as of 12/31/2025
• Old 401(k) from Employer B (still at the plan): $150,000 as of 12/31/2025

At age 73 the Uniform Lifetime Table divisor is 26.5 (IRS Pub. 590-B, Table III) — roughly 3.77% of the prior year-end balance. Margaret’s instinct is to add up all five balances ($1,400,000), divide by 26.5, get a $52,830 total, and pull the whole thing from her largest IRA to keep her paperwork simple.

That instinct is half right and half a $3,774 mistake.

The IRA side: aggregation works

Margaret computes an RMD for each IRA, then totals them. Because the IRS treats all of a taxpayer’s traditional IRAs as a single pool for distribution purposes (Treas. Reg. §1.408-8, A-9), she can pull the combined IRA total from any one IRA — or split it however she likes.

Margaret can take the full $37,736 from the Fidelity IRA alone, leaving Schwab and Vanguard untouched. The IRS does not care which IRA the money leaves, only that the aggregate IRA RMD is satisfied by December 31. This is the convenience the “aggregation rule” buys you.

The 401(k) side: aggregation fails

Now the trap. Margaret’s two old 401(k)s each compute their own RMD, and each amount must be distributed from that same plan. There is no pooling. Over-drawing one 401(k) does not cover the other, and pulling extra from an IRA does nothing for either 401(k).

If Margaret had followed her “total everything and take it from one IRA” instinct, she would have left both 401(k)s untouched. Employer A’s $9,434 and Employer B’s $5,660 would both be missed RMDs — a $15,094 shortfall. The §4974 excise tax at 25% on that shortfall is $3,774, on top of the regular income tax she owes when she eventually withdraws the money. That is the half-a-mistake hiding inside the convenient-sounding shortcut.

Done correctly, Margaret takes $37,736 from any IRA, $9,434 from Employer A’s plan, and $5,660 from Employer B’s plan — a total of $52,830 across three distinct withdrawals, each landing in the right silo.

The four silos, and why they never touch

Most write-ups frame this as “IRA vs 401(k).” It’s cleaner to think of four independent silos. Within a silo you can aggregate; across silos you never can.

So a retiree could be juggling four separate aggregation universes at once. Margaret only deals with two of them — her IRA pool and her two non-aggregating 401(k)s.

One detail trips people up inside the IRA silo: SEP-IRAs and SIMPLE-IRAs aggregate right alongside your traditional IRAs. They are technically IRAs for distribution purposes, so a self-employed retiree with a SEP-IRA, a SIMPLE-IRA, and two rollover IRAs has one combined IRA RMD that can come from any of the four. The presence of a SEP or SIMPLE does not create a separate silo — only the four categories in the table above are distinct. Roth IRAs are simply absent from the entire calculation because the original owner never has a lifetime RMD on a Roth.

The inherited-IRA silo deserves its own caution because the consequences of mixing it up are the harshest. If you inherited an IRA from your late mother and another from a sibling, those are two inherited-IRA pools, not one — and neither can be combined with the IRAs you funded yourself. You compute a separate RMD for each inherited account under its own schedule (often the 10-year rule for non-spouse beneficiaries) and satisfy each from its own account. The convenient “take it all from one place” logic that works for your personal IRAs evaporates the moment an inherited account enters the picture.

When RMDs even start: age 73 or 75

SECURE 2.0 §107 set the RMD starting age by birth year. If you were born 1951–1959, your first RMD is the year you turn 73. Born 1960 or later, it’s the year you turn 75. Margaret, born in 1953, is in the 73 group. Knowing your start year matters because the aggregation rules only kick in once you have a required distribution to allocate — and because deferring your very first RMD to the following April 1 can stack two RMDs into one tax year (covered in the first-year double-withdrawal guide linked below).

What most people get wrong

1. “A 401(k) is just like an IRA for RMDs.” It isn’t. The single most common multi-account error is treating employer plans as poolable. They are not. Each 401(k) stands alone.
2. “I can satisfy my 401(k) RMD by pulling extra from my IRA.” No. Cross-silo satisfaction is never allowed. An over-distribution from an IRA is just an over-distribution — it does nothing for the 401(k) and you still owe the §4974 penalty on the 401(k) shortfall.
3. “Inherited IRAs aggregate with my own.” Never. An inherited IRA RMD must come from the inherited account, and inherited IRAs from different decedents each form their own pool.
4. “The penalty is still 50%.” Outdated. SECURE 2.0 §302 cut it to 25%, and to 10% if corrected within the two-year window with Form 5329. Plenty of older articles still cite 50%.
5. “Roth balances need an RMD too.” Roth IRAs have no lifetime RMDs for the original owner, and as of 2024 designated Roth 401(k) accounts no longer have lifetime RMDs either (SECURE 2.0 §325). Only pre-tax money is in the RMD calculation.

The simplification lever: consolidate before 73

The per-plan 401(k) trap exists only because Margaret left two old 401(k)s sitting at former employers. The fix is mechanical: roll those old 401(k)s into a traditional IRA before her first RMD year. Once inside the IRA pool, those balances aggregate with her other IRAs, and the entire combined RMD can come from one account again. Five RMD calculations collapse into one.

Three constraints to respect:

• Timing. You cannot roll over an RMD. If you’re already in your RMD year, that year’s 401(k) RMD must come out first; only the remainder can roll. Do the rollover in a year before age 73 to avoid the dance.
• Creditor protection. 401(k) money has unlimited federal ERISA creditor protection; IRA protection is more limited and state-dependent. If you face litigation exposure, weigh this.
• Net unrealized appreciation (NUA). If a 401(k) holds appreciated employer stock, rolling to an IRA can forfeit the NUA tax break (IRC §402(e)(4)). Check before you move company stock.

For balances that are plain mutual funds with no NUA and no creditor concern — the situation for most retirees with old plans — consolidating into one IRA is the highest-leverage move to make the aggregation rules work for you instead of against you.

There is one scenario where you should deliberately keep a 401(k) rather than roll it: the “still-working” exception. If you are still employed at age 73 and you do not own more than 5% of the company, you can delay RMDs on that current employer’s plan until you actually retire (IRC §401(a)(9)(C)). That exception covers only the active plan — it does nothing for old 401(k)s at former employers, and it never applies to IRAs. So a 74-year-old who is still working has a real reason to leave money in the current 401(k) (to postpone its RMD) while still rolling the old 401(k)s into an IRA to clean up the per-plan trap on the inactive accounts. Margaret is retired, so the exception does not help her; everything she holds is in pay-status.

A second point on mechanics: when you do roll an old 401(k) to an IRA, request a direct trustee-to-trustee transfer, not a check made out to you. A check paid to you triggers mandatory 20% withholding on employer plans, and you would have to come up with that 20% from other cash within 60 days to complete a full rollover. Direct transfers avoid the withholding entirely and never touch the once-per-year IRA rollover limit.

Your one-page January worksheet

Every January, before you take a dollar, build a list with one line per account:

1. Account name and type (IRA / 401(k) / 403(b) / inherited IRA)
2. December 31 prior-year balance
3. Divisor from the Uniform Lifetime Table (26.5 at 73; the table steps down each year)
4. This year’s RMD (balance ÷ divisor)
5. Silo grouping — sum the IRA lines, sum the 403(b) lines, keep every 401(k)/457(b) line standing alone

Then satisfy each silo by December 31: take the IRA aggregate from any IRA, the 403(b) aggregate from any 403(b), and each employer-plan RMD from its own plan. That single sheet is what stands between you and a 25% surprise.

The decision lever

If you hold multiple IRAs only, aggregation is a pure convenience — take the combined total wherever you like and stop worrying. If you hold even one old 401(k) or 457(b), you have a per-plan obligation that no IRA withdrawal can cover, and the cleanest move is to roll those plans into your IRA before age 73 so the per-plan rule never bites. The lever is consolidation timing: do it in a non-RMD year, mind NUA and creditor protection, and you turn a $3,774 penalty risk into a single, simple aggregated number.