RMD Calculator

Understanding Required Minimum Distributions (RMD)

A Required Minimum Distribution (RMD) is the minimum amount of money that the U.S. Internal Revenue Service (IRS) mandates you must withdraw from your tax-deferred retirement accounts each year. These rules ensure that individuals do not keep tax-advantaged funds in their retirement accounts indefinitely.

RMD rules apply to traditional IRAs, SEP IRAs, SIMPLE IRAs, as well as 401(k), 403(b), and 457(b) plans. Note that starting in 2024, designated Roth accounts in employer-sponsored plans (like Roth 401(k)s) are no longer subject to RMD rules during the owner's lifetime, matching the lifetime RMD exemption already enjoyed by Roth IRAs.

How the RMD is Calculated

Your RMD is calculated by dividing your retirement account balance as of December 31 of the previous calendar year by a life expectancy factor (distribution period) determined by the IRS:

$$\text{RMD} = \frac{\text{Prior Year-End Account Balance}}{\text{Distribution Period (Factor)}}$$

The IRS publishes three life expectancy tables in Publication 590-B:

• Uniform Lifetime Table (Table III): Used by most account owners to determine their distributions.
• Joint Life and Last Survivor Expectancy Table (Table II): Used if the sole beneficiary is a spouse who is more than 10 years younger than the owner.
• Single Life Expectancy Table (Table I): Typically used by beneficiaries inheriting retirement accounts.

RMD Starting Age under SECURE Act 2.0

The SECURE Act 2.0 raised the starting age for Required Minimum Distributions:

• If you were born in 1950 or earlier, your RMD starting age is 72.
• If you were born between 1951 and 1959, your RMD starting age is 73.
• If you were born in 1960 or later, your RMD starting age is 75.