Required Minimum Distribution (RMD) Calculator
Understanding Required Minimum Distributions (RMDs)
Required Minimum Distributions (RMDs) are the amounts that individuals must withdraw annually from certain retirement accounts, starting at a specific age. These withdrawals are taxed as ordinary income. The primary purpose of RMDs is to ensure that individuals gradually deplete their tax-deferred retirement savings during their lifetime and that the government eventually collects the taxes owed.
Which Accounts Require RMDs?
RMDs generally apply to:
- Traditional IRAs (Individual Retirement Arrangements)
- SEP IRAs (Simplified Employee Pension IRAs)
- SIMPLE IRAs (Savings Incentive Match Plan for Employees IRAs)
- 401(k), 403(b), 457(b), and profit-sharing plans
- Other employer-sponsored retirement plans
Note: Roth IRAs do not have RMDs for the original owner. However, beneficiaries of Roth IRAs may be subject to RMD rules.
When Do RMDs Start?
The age at which RMDs must begin has changed over time due to legislation. Currently, for most individuals, RMDs begin at age 73. There are specific rules for those who were already taking RMDs under previous regulations.
How is the RMD Calculated?
The basic formula for calculating your RMD is:
RMD = (Account Balance on December 31st of the Previous Year) / (Life Expectancy Factor)
* Account Balance: This is the total fair market value of your retirement account as of December 31st of the preceding year. * Life Expectancy Factor: This is a number provided by the IRS in tables (Uniform Lifetime Table, Joint Life and Last Survivor Expectancy Table, or the Single Life Expectancy Table, depending on circumstances). The Uniform Lifetime Table is the most common. The factor is based on your age during the year you are taking the distribution.
Using the Uniform Lifetime Table (Most Common Scenario)
The IRS provides the Uniform Lifetime Table (Table III) in Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs). This table assigns a distribution period (life expectancy factor) based on your age. For example:
- Age 70: 27.4 years
- Age 71: 26.5 years
- Age 72: 25.6 years
- Age 73: 24.7 years
- Age 74: 23.8 years
- Age 75: 22.9 years
- Age 76: 22.0 years
- Age 77: 21.1 years
- Age 78: 20.3 years
- Age 79: 19.5 years
- Age 80: 18.7 years
- Age 81: 17.9 years
- Age 82: 17.1 years
- Age 83: 16.3 years
- Age 84: 15.5 years
- Age 85: 14.8 years
- Age 86: 14.1 years
- Age 87: 13.4 years
- Age 88: 12.7 years
- Age 89: 12.0 years
- Age 90: 11.4 years
*Note: These factors are subject to change by the IRS. Always refer to the latest IRS publications for the most current tables.*
Special Circumstances
If your sole beneficiary is your spouse, and your spouse is more than 10 years younger than you, you might use the Joint Life and Last Survivor Expectancy Table (Table II) instead. This can result in a smaller RMD.
Disclaimer
This calculator is for informational purposes only and does not constitute financial or tax advice. Consult with a qualified financial advisor or tax professional to understand your specific RMD obligations. The IRS updates its tables and regulations periodically.