RMD Calculator

What Is a Required Minimum Distribution (RMD)?

A Required Minimum Distribution (RMD) is the minimum amount of money you must withdraw each year from your tax-deferred retirement accounts once you reach a certain age. The IRS mandates these withdrawals to ensure that retirement savings, which grew tax-free for decades, are eventually subject to income tax. RMDs apply to Traditional IRAs, 401(k)s, 403(b)s, 457(b)s, SEP IRAs, and SIMPLE IRAs. Notably, Roth IRAs are exempt from RMDs during the original owner's lifetime.

How Is the RMD Calculated?

Your RMD is calculated by dividing your retirement account balance (as of December 31 of the prior year) by a distribution period factor from IRS life expectancy tables. The formula is:

RMD = Account Balance / Distribution Period Factor

Most account holders use the Uniform Lifetime Table. If your sole beneficiary is a spouse who is more than 10 years younger than you, you may use the Joint Life and Last Survivor Table, which provides a longer distribution period and therefore a smaller required withdrawal.

When Do RMDs Begin? (SECURE 2.0 Act Rules)

• Born 1950 or earlier: RMDs began at age 72 (or 70.5 under pre-SECURE Act rules).
• Born 1951-1959: RMDs begin at age 73 under the SECURE 2.0 Act.
• Born 1960 or later: RMDs begin at age 75 under the SECURE 2.0 Act.

Your first RMD must be taken by April 1 of the year following the year you reach your RMD age. All subsequent RMDs must be taken by December 31 each year. Note: if you delay your first RMD to April 1, you will need to take two RMDs in the same calendar year (which could push you into a higher tax bracket).

IRS Uniform Lifetime Table (2024 and Later)

As you age, the distribution period decreases, meaning you must withdraw a larger percentage of your balance each year. At age 73, the factor is 26.5 (about 3.77% withdrawal), while at age 90, it drops to 12.2 (about 8.2% withdrawal).

What Happens If You Miss an RMD?

Under the SECURE 2.0 Act (effective 2023), the penalty for failing to take your full RMD was reduced from 50% to 25% of the shortfall. If you correct the mistake in a timely manner (by taking the missed distribution and filing a corrected return within the IRS correction window), the penalty may be further reduced to just 10%. It is critical to take your full RMD each year to avoid these penalties.

Tips to Minimize RMD Tax Impact

• Roth Conversions: Converting Traditional IRA funds to a Roth IRA before RMD age reduces future required distributions. You pay taxes on the conversion now but eliminate RMDs on those funds.
• Qualified Charitable Distributions (QCD): If you are 70.5 or older, you can donate up to $105,000 per year directly from your IRA to a qualified charity. QCDs count toward your RMD but are excluded from taxable income.
• Strategic Timing: Consider taking your first RMD in the year you reach RMD age rather than deferring to April 1 of the next year, to avoid two RMDs in one tax year.
• Tax Bracket Management: If your RMD pushes you into a higher bracket, consider spreading withdrawals throughout the year or combining with other tax planning strategies.
• Still Working Exception: If you are still working and do not own more than 5% of the company, you may delay 401(k) RMDs from your current employer's plan until you retire (does not apply to IRAs).

Frequently Asked Questions