1. What is RMD for Inherited IRA?

Required Minimum Distributions (RMDs) are amounts that the owner of an inherited IRA must withdraw annually. The calculation uses IRS life expectancy tables to determine how much must be withdrawn each year.

2. How Does the Calculator Work?

The calculator uses the RMD formula:

Where:

• Account Balance — The IRA balance as of December 31 of the previous year
• Life Expectancy Factor — From IRS Publication 590-B tables based on beneficiary's age

Explanation: The formula divides the account balance by the life expectancy factor to determine the minimum amount that must be withdrawn for the year.

3. Importance of RMD Calculation

Details: Proper RMD calculation is crucial to avoid IRS penalties (50% of the amount that should have been withdrawn). This is especially important for inherited IRAs which have different rules than regular IRAs.

4. Using the Calculator

Tips: Enter the account balance in dollars and the life expectancy factor from the appropriate IRS table. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Where do I find my life expectancy factor?
A: The factor comes from IRS Publication 590-B tables, with different tables for different beneficiary types (spouse, non-spouse, etc.).

Q2: When must RMDs be taken from an inherited IRA?
A: Generally by December 31 each year, with the first year having special rules depending on when the original owner died.

Q3: Can I withdraw more than the RMD?
A: Yes, you can always withdraw more than the required minimum amount.

Q4: What happens if I don't take my RMD?
A: The IRS imposes a 50% penalty on the amount that should have been withdrawn but wasn't.

Q5: Are RMD rules different for inherited Roth IRAs?
A: While Roth IRAs don't require RMDs for original owners, inherited Roth IRAs do require RMDs (though distributions are typically tax-free).