RMD Calculator
Determine Required Minimum Distributions from IRAs and 401(k)s based on age, balance, and IRS life expectancy tables. Plan withdrawals to avoid penalties.
Formula
RMD = Account Balance / Life Expectancy Factor
IRS requires annual minimum withdrawals from tax-deferred accounts starting at age 73. Factors decrease each year, increasing RMD percentage.
Worked Examples
Example 1: Basic RMD Calculation
Problem:Age 75 with $500,000 Traditional IRA balance as of December 31. Calculate RMD.
Solution:Find the life expectancy factor for age 75:\nFrom IRS Uniform Lifetime Table: 24.6\n\nRMD = Account Balance ÷ Life Expectancy Factor\nRMD = $500,000 ÷ 24.6\nRMD = $20,325\n\nThis is the MINIMUM you must withdraw.\nAs a percentage: 4.1% of balance\n\nTax impact (assuming 22% bracket):\nTax on RMD: $20,325 × 22% = $4,472
Result:$20,325 RMD (4.1% of balance)
Example 2: First Year RMD Timing
Problem:Turn 73 in 2024. When are first two RMDs due, and what's the tax impact?
Solution:First RMD deadline options:\n- By April 1, 2025 (extended deadline for first RMD)\n- OR by December 31, 2024 (normal deadline)\n\nIf you wait until April 2025:\n- First RMD due by April 1, 2025\n- Second RMD due by December 31, 2025\n- Two RMDs in one tax year (2025)!\n\nExample with $400,000 balance:\nEach RMD: ~$15,000\nTwo in 2025: $30,000 extra income\nMay push into higher bracket\n\nBetter strategy: Take first RMD in 2024 to spread income across two tax years.
Result:Take first RMD in year you turn 73 to avoid bunching
Example 3: QCD Strategy
Problem:Age 75, $25,000 RMD, regularly donate $10,000 to charity. How does QCD help?
Solution:Without QCD:\nRMD: $25,000 (taxable income)\nCharitable donation: $10,000 (itemized deduction)\nIf standard deduction is higher, donation gives no tax benefit\n\nWith QCD:\nDirect $10,000 from IRA to charity (QCD)\nRemaining RMD: $15,000 (taxable income)\n\nResult:\n- $10,000 never appears as income\n- Still satisfies RMD requirement\n- Can still take standard deduction\n- Lower AGI may reduce:\n - Social Security taxation\n - Medicare premiums (IRMAA)\n - Capital gains bracket\n\nTax savings example (22% bracket):\n$10,000 × 22% = $2,200 saved + potential IRMAA savings
Result:QCD saves $2,200+ vs regular donation
Frequently Asked Questions
What is an RMD (Required Minimum Distribution)?
RMD is the minimum amount you must withdraw annually from tax-deferred retirement accounts (Traditional IRA, 401k, 403b) starting at age 73. The IRS requires these withdrawals so they eventually collect taxes on pre-tax contributions and growth. Failure to take RMDs results in penalties.
What is the penalty for not taking RMD?
SECURE 2.0 reduced the penalty from 50% to 25% of the amount not withdrawn. If you correct the error within 2 years (take the missed distribution), the penalty drops to 10%. File Form 5329 and request a waiver - IRS often grants relief for reasonable errors.
How is RMD calculated?
RMD = Account balance (as of December 31 prior year) ÷ Life expectancy factor. The IRS provides life expectancy tables based on age. At 73: factor is 26.5. At 80: 20.2. At 90: 12.2. The percentage increases each year - from about 3.8% at 73 to over 8% at 90.
Can I take more than the RMD?
Yes, you can withdraw any amount above the RMD. But remember all withdrawals are taxed as ordinary income. Some strategies: take more in low-income years, smooth out retirement income, or intentionally withdraw more to stay in a lower bracket before Social Security starts.