The rule that trips up new retirees is which account the required minimum distribution is taken from. A 73-year-old with a traditional IRA and two old 401(k) plans from previous employers is holding three accounts that appear interchangeable on the statement but are treated as three separate obligations by the IRS.
Taking one clean withdrawal to cover the whole year sounds efficient. Under the rules, it satisfies exactly one of the three RMDs.
Why One Withdrawal Does Not Cover Three Accounts
Traditional IRAs operate under an aggregation rule. A retiree with multiple IRAs calculates the required minimum distribution separately for each account, adds them together, and then can pull the total from any single IRA or any combination of accounts. That flexibility leads many retirees to assume the same logic applies across all of their retirement accounts.
The same logic does not carry over to different plan types. A 401(k) is a defined contribution plan that differs from an IRA, and each 401(k) has its own RMD, which must be calculated and taken directly from that plan. The IRA aggregation rule does not cross plan types.
A withdrawal from an IRA cannot cover a 401(k) RMD, and a withdrawal from one 401(k) cannot satisfy another 401(k)’s RMD, even when both accounts sit at the same custodian. For someone with two old workplace plans and an IRA, that adds up to three separate distributions in the same calendar year.
The Penalty for Getting It Wrong
When an RMD is missed, the IRS applies an excise tax on the amount that should have been distributed. Under SECURE 2.0, that penalty is 25% of the shortfall, down from the older 50% figure. The rate drops to 10% if the missed distribution is taken and reported within two years using Form 5329.
In the scenario described, the single withdrawal from the IRA cleared the IRA obligation. The two 401(k) balances still owed their own RMDs, and each unpaid amount became its own penalty base.
The math is unforgiving because the RMD is calculated on the prior year-end balance, not on what feels reasonable to withdraw. According to Fidelity’s Q3 2025 retirement analysis, the average 401(k) balance for savers age 70 and older is $250,000, and the average balance for Baby Boomer participants is $267,900, with an average IRA balance of $257,002.
Balances of that size produce first-year RMDs in the low-to-mid four figures per account. Two missed 401(k) RMDs of a few thousand dollars each can generate a penalty large enough to matter to a fixed-income household.
How Common Multiple-Account Retirees Are
Job changes leave orphan 401(k) balances behind. Fidelity counted 654,000 401(k) millionaires and 559,181 IRA millionaires in Q3 2025, and many of the same savers appear in both counts because they never consolidated old plans. Retirees are also carrying those accounts into an environment where financial cushion is thinner than it looked a year ago.
The personal savings rate has fallen from 5.2% in the first quarter of 2025 to 2.8% in the second quarter of 2026, while average annual household expenditures reached $78,535 in 2024. A penalty on a missed RMD is a bill households at this stage generally cannot absorb without pulling from principal.
What the Rule Actually Requires
The RMD age is 73 under SECURE 2.0. In the year an account holder turns 73, the first RMD can be delayed until April 1 of the following year, but that creates two distributions in one tax year, which usually pushes taxable income higher than expected. For a retiree with three accounts, the practical checklist is short.
- Calculate the RMD separately for each 401(k) using the December 31 prior-year balance and the IRS Uniform Lifetime Table divisor.
- Take each 401(k) distribution from its own plan. Rolling old 401(k)s into an IRA before the year an RMD is due removes the separate-account problem going forward, since IRAs can be aggregated.
- Calculate the combined IRA RMD and withdraw it from any IRA the retiree chooses.
The tale of the 73-year-old with one withdrawal and two penalties is really about how retirement accounts no longer function as a single pool of money once RMDs begin. Each 401(k) is treated by the IRS as a separate obligation. Consolidating old workplace plans into an IRA before turning 73, or setting up separate distributions from each 401(k), can help prevent a single missed step from triggering a 25% excise tax on two accounts simultaneously.
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