1. What is Required Minimum Distribution?

Required Minimum Distribution (RMD) is the minimum amount you must withdraw from your retirement account each year once you reach the age of 72 (or 70½ if you reached 70½ before January 1, 2020). The IRS provides life expectancy tables to determine your distribution period.

2. How Does the Calculator Work?

The calculator uses the RMD formula:

Where:

• Account Balance — Your IRA balance as of December 31 of the previous year
• Life Expectancy Factor — From IRS Uniform Lifetime Table based on your age

Explanation: The formula calculates the minimum amount you're required to withdraw to avoid IRS penalties.

3. Importance of RMD Calculation

Details: Calculating your RMD correctly is crucial to avoid the 50% excise tax on amounts not withdrawn as required. It also helps in retirement income planning.

4. Using the Calculator

Tips: Enter your total IRA account balance and the life expectancy factor from the IRS Uniform Lifetime Table corresponding to your age. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: When must I take my first RMD?
A: By April 1 of the year following the year you turn 72 (or 70½ if born before July 1, 1949). Subsequent RMDs must be taken by December 31 each year.

Q2: Where can I find the IRS life expectancy tables?
A: The IRS publishes these in Publication 590-B. The Uniform Lifetime Table is used by most IRA owners.

Q3: What happens if I don't take my RMD?
A: The IRS imposes a 50% excise tax on the amount that should have been withdrawn but wasn't.

Q4: Can I withdraw more than the RMD?
A: Yes, you can always withdraw more than the required minimum, but not less.

Q5: Do Roth IRAs have RMDs?
A: Roth IRAs do not require withdrawals until after the death of the owner.