1. What is Required Minimum Distribution (RMD)?

RMD is the minimum amount you must withdraw annually from your retirement accounts (like 401(k)s and IRAs) starting at age 73 (as of 2024). The IRS provides life expectancy factors to calculate these mandatory distributions.

2. How Does the Calculator Work?

The calculator uses the RMD formula:

Where:

• Account Balance — Your retirement account balance as of December 31 of the previous year
• Life Expectancy Factor — From IRS Uniform Lifetime Table (Publication 590-B)

Explanation: The equation divides your account balance by an IRS-determined distribution period based on your age.

3. Importance of RMD Calculation

Details: Calculating RMDs correctly is crucial to avoid IRS penalties (25% of the amount not withdrawn). RMDs ensure retirement accounts are eventually taxed.

4. Using the Calculator

Tips: Enter your total retirement account balance and the appropriate IRS life expectancy factor for 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 after you turn 73 (for those born 1951-1959). Subsequent RMDs are due by December 31 each year.

Q2: Where do I find my life expectancy factor?
A: IRS Publication 590-B provides the Uniform Lifetime Table. Factors range from 27.4 at age 72 to 1.9 at age 115+.

Q3: What accounts require RMDs?
A: Traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, and other defined contribution plans. Roth IRAs don't require RMDs during the owner's lifetime.

Q4: Can I withdraw more than my RMD?
A: Yes, you can always withdraw more than the required minimum, but not less without penalty.

Q5: Are RMDs taxable?
A: Yes, RMDs from tax-deferred accounts are taxed as ordinary income in the year withdrawn.