RMD Calculator
Estimate your annual Required Minimum Distribution (RMD) from your retirement accounts like an IRA or 401(k). This tool helps you project withdrawals and see how your balance may change over time.
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What is a Required Minimum Distribution (RMD)?
A Required Minimum Distribution, or RMD, is the minimum amount of money that the IRS requires you to withdraw each year from most tax-deferred retirement accounts. This rule applies to accounts like Traditional IRAs, SEP IRAs, SIMPLE IRAs, and 401(k) plans. The RMD rules ensure that individuals eventually pay taxes on the funds that have grown tax-deferred for years. RMDs typically must begin once you reach age 73.
How RMDs are Calculated
The calculation for your RMD is straightforward. You take your retirement account's balance from December 31st of the previous year and divide it by a life expectancy factor provided by the IRS.
Formula: RMD = Account Balance (as of Dec 31 last year) / Life Expectancy Factor
This RMD calculator uses the IRS Uniform Lifetime Table by default to find your factor based on your age. You can also input a custom factor if your situation requires it (e.g., using a different table for a spousal beneficiary who is more than 10 years younger).
IRS Life Expectancy Tables
The IRS provides three primary tables for determining life expectancy factors:
- Uniform Lifetime Table: This is the most commonly used table for most unmarried account owners, married owners whose spouses aren't more than 10 years younger, and married owners whose spouses are not the sole beneficiary. Our RMD calculator uses this table.
- Joint Life and Last Survivor Expectancy Table: Used when the sole beneficiary of the account is a spouse who is more than 10 years younger than the account owner.
- Single Life Expectancy Table: Used for beneficiaries of an inherited account.
Tax Implications of RMDs
Withdrawals from traditional retirement accounts, including RMDs, are generally treated as ordinary income and are subject to federal and state income taxes. They are added to your other income for the year and taxed at your marginal tax rate. It's important to plan for this tax liability. The penalty for failing to take an RMD is severe—currently 25% of the amount that should have been withdrawn, which can be reduced to 10% if corrected promptly.
Planning Tips for Retirement Accounts
- Plan Ahead: Don't wait until the last minute. Know your RMD amount and plan the withdrawal.
- Reinvest if Possible: You don't have to spend your RMD. If you don't need the cash, you can reinvest it in a taxable brokerage account.
- Qualified Charitable Distributions (QCDs): If you are age 70½ or older, you can donate up to $100,000 directly from your IRA to a qualified charity. This amount can count towards your RMD and is excluded from your taxable income.
- Aggregate Your RMDs: If you have multiple Traditional IRAs, you must calculate the RMD for each one separately. However, you can withdraw the total RMD amount from just one or any combination of your IRAs. This rule does not apply to 401(k)s; the RMD for each 401(k) plan must be taken from that specific plan.
Frequently Asked Questions
- 1. What is the current RMD age?
- The age to begin taking RMDs is currently 73 for those who turn 72 after Dec 31, 2022. This age is scheduled to rise to 75 in 2033.
- 2. Do Roth IRAs have RMDs?
- No, Roth IRAs do not have RMDs for the original account owner. However, beneficiaries of an inherited Roth IRA may be subject to RMD rules.
- 3. Can I take more than the RMD?
- Yes, you can always withdraw more than the required minimum amount. The additional amount will also be taxed as ordinary income.
- 4. What is the deadline to take my RMD?
- The deadline for taking your RMD is December 31st each year. For your very first RMD, you have a grace period until April 1st of the year *following* the year you turn the required age (e.g., 73). However, if you delay your first RMD, you will have to take two RMDs in that second year, which could have significant tax consequences.
