RMD Calculator (Required Minimum Distribution)

10-Year RMD Projection

This table shows your projected RMD amounts over the next 10 years, assuming the expected return rate you specified.

Understanding Required Minimum Distributions (RMDs)

Required Minimum Distributions (RMDs) are mandatory withdrawals that retirement account holders must take from tax-deferred accounts once they reach a certain age. Understanding RMDs is crucial for retirement planning, as failing to take the required distribution can result in significant tax penalties.

What is an RMD?

An RMD is the minimum amount you must withdraw from your retirement account each year once you reach the required age. The purpose of RMDs is to ensure that people use their tax-advantaged retirement savings for retirement and don't leave the money to grow indefinitely without paying taxes.

RMDs apply to the following types of retirement accounts:

• Traditional IRAs
• SEP IRAs
• SIMPLE IRAs
• 401(k) plans
• 403(b) plans
• 457(b) plans
• Profit-sharing plans

How to Calculate RMD

The RMD calculation is straightforward once you have the necessary information:

To calculate your RMD:

1. Determine your account balance as of December 31 of the previous year
2. Find your distribution period from the IRS Uniform Lifetime Table based on your age
3. Divide the balance by the distribution period to get your RMD

IRS Uniform Lifetime Table (2024)

This table is used by most IRA owners to determine their distribution period. If your sole beneficiary is a spouse more than 10 years younger, use the Joint and Last Survivor Table instead.

RMD Rules for Different Account Types

Traditional IRA

RMDs from Traditional IRAs must begin by April 1 of the year following the year you turn the required age (73 for most people). After that first year, RMDs must be taken by December 31 of each year. If you have multiple Traditional IRAs, you can calculate the RMD for each but take the total from any one or combination of your Traditional IRAs.

401(k) Plans

If you're still working and don't own more than 5% of the company, you may be able to delay RMDs from your current employer's 401(k) until you retire. RMDs from 401(k)s must be taken separately from each plan; you cannot aggregate them like IRAs.

Roth IRAs

Roth IRAs do not require RMDs during the owner's lifetime. However, inherited Roth IRAs are subject to RMD rules for beneficiaries.

Penalties for Missing RMDs

The penalty for not taking your RMD or taking less than required used to be 50% of the amount not distributed. The SECURE 2.0 Act reduced this penalty:

• 25% excise tax on the amount not taken (reduced from 50%)
• 10% excise tax if corrected within the "correction window" (generally 2 years)

Strategies for Managing RMDs

1. Take Monthly Distributions: Instead of one annual withdrawal, take monthly distributions to help manage your budget and tax withholding.
2. Qualified Charitable Distributions (QCDs): If you're 70½ or older, you can donate up to $100,000 directly from your IRA to charity. This counts toward your RMD but isn't included in taxable income.
3. Roth Conversions: Consider converting some Traditional IRA funds to Roth before RMDs begin to reduce future RMD amounts and tax liability.
4. Aggregate IRAs Strategically: If you have multiple IRAs, calculate which accounts to withdraw from based on investment performance and tax efficiency.

Frequently Asked Questions