IRA aggregation rules let owners combine RMDs across personal accounts, but inherited IRAs must take separate distributions, even those inherited from a spouse.
Missing an inherited IRA RMD triggers a 25% excise tax, reduced to 10% if corrected promptly by filing Form 5329.
Surviving spouses can escape the trap by rolling the inherited IRA into their own name, merging it into their personal aggregation pool.
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A retiree with multiple traditional IRAs can add up the required minimum distributions from each account and pull the total from any single one. This aggregation shortcut is written into IRS regulations for IRAs owned in your own name. It does not extend to an IRA you inherit, even when the person you inherited it from was your spouse. That is where a 73-year-old with two accounts can walk into a penalty he did not know existed.
Under IRS Publication 590-B, a traditional IRA owner who holds multiple accounts calculates the required minimum distribution for each one separately, then withdraws the combined amount from any single account or any mix of them. An inherited IRA follows a different track. It can only be aggregated with other IRAs inherited from the same decedent. It cannot be combined with the beneficiary's own IRA to satisfy either account's RMD.
The distinction matters most for surviving spouses, because they are the only beneficiaries who can choose which bucket the money sits in. A surviving spouse who inherits a traditional retirement account has three choices, and the first is to remain a beneficiary of the IRA, in which case required minimum distributions will be based on the age of your deceased spouse.
Leaving the account in beneficiary form preserves flexibility when the deceased spouse was younger, but it locks the account into the inherited-IRA rules, including the ban on aggregation.
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The 73-year-old had two accounts on his year-end statement: his own traditional IRA and the inherited IRA still titled as a beneficiary account in his late wife's name. His custodian calculated an RMD for each. He read the two figures, added them, and withdrew the full amount from his own IRA in December. The withdrawal from his own account exceeded his personal RMD. The inherited IRA showed a zero distribution. The IRS flags that shortfall.
Under the SECURE 2.0 Act, the excise tax on a missed RMD is 25% of the amount that should have been withdrawn, down from the 50% penalty that applied for decades. If the account owner corrects the shortfall within a defined correction window and files Form 5329, the penalty drops to 10%. A missed $8,000 inherited-IRA RMD becomes a $2,000 tax bill at the standard rate, or $800 if caught and corrected quickly. The distribution itself is still owed and still taxable as ordinary income in the year it is finally taken.
A surviving spouse can roll the inherited account into an IRA in their own name, either by direct transfer or by treating the existing account as their own. Once the money sits in an IRA titled in the surviving spouse's name, it is no longer an inherited IRA. It joins the aggregation pool with any other traditional IRAs they own, and a single withdrawal can satisfy the combined RMD the following year. If the surviving spouse is already past 73, the spousal rollover simplifies the paperwork and eliminates the aggregation trap.
The population reaching RMD age is larger than at any previous point, and many are managing two IRAs for the first time after a spouse's death. The FDIC national average on a 12-month CD was 1.71% APY as of August 1, 2026, which means the interest a retiree earns on the cash portion of an IRA is thin, and every dollar lost to an avoidable penalty represents months of yield. Social Security is scheduled to rise by a 3.3% cost-of-living adjustment in 2027 based on 2 of 3 Q3 months, a benefit that will not offset a 25% excise tax.
The aggregation rule applies to a growing group of households where one spouse has died and the survivor is now handling both sets of accounts. The distinction between an IRA you own and an IRA you inherited is a matter of how the account is titled, and the IRS treats those titles as separate for RMD purposes regardless of whose statement they arrive on. It is one of several quiet rules that can drain a retirement account, and we mapped the rest in a free guide to the retiree tax traps.
If you've saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.
Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)
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