Consolidate Traditional IRAs or Keep Them Separate?

Column distributed by Hearst Connecticut Media Group.

Links to resources referenced:

• IRS: Retirement plan and IRA required minimum distributions FAQs
  • https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs
    • Related column excerpt:
      • “RMDs are based on the previous year’s Dec. 31 values of the retirement accounts (see IRS webpage ‘Retirement plan and IRA required minimum distributions FAQs’).”  
• Investor.gov: Required Minimum Distribution Calculator
  • https://www.investor.gov/financial-tools-calculators/calculators/required-minimum-distribution-calculator
    • Related column excerpt:
      • “Assume that by Dec. 31, 2024, Hank had four IRAs totaling $1 million. When he looks up the amount he needs to take in RMDs for 2025, he finds that the divisor for his age (75) is 24.6 (in Table III). That means he will need to take RMDs totaling about $41,000 in 2025, using the RMD calculator at Investor.gov.”
• FINRA: “Required Minimum Distributions: Know Your Deadlines”
  • https://www.finra.org/investors/insights/required-minimum-distributions
    • Related column excerpt:
      • “Hank is free to take this amount from any one of his IRAs or to spread the RMD among his IRAs. (By the way, this does not apply to 401(k)s -- each 401(k) has a separate RMD requirement. Read more about this rule in ‘Required Minimum Distributions: Know Your Deadlines’ at the FINRA website.)”