RMD Calculator
Calculate Required Minimum Distributions from retirement accounts
RMD Calculator
Once a person reaches the age of 73, the IRS requires retirement account holders to withdraw a minimum amount of money each year â this amount is referred to as the Required Minimum Distribution (RMD). This calculator calculates the RMD depending on your age and account balance. The calculations are based on the IRS Publication 590-B, so the calculator is intended for residents of the United States only.
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Result
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đ Understanding Required Minimum Distributions (RMDs)
What are RMDs?
A required minimum distribution (RMD) is the minimum amount the IRS mandates you to withdraw from certain tax-deferred retirement accounts. The specific amount varies based on your account balance and life expectancy as determined by the IRS. As you withdraw your RMD, you will also pay taxes.
Note: RMDs are just that: required minimum distributions. If you need to pull more money from your accounts after reaching retirement age, you can withdraw more than the minimum.
Important Dates for Taking RMDs
You're required to take your first RMD by April 1st in the calendar year after you turn 73. This age was increased from 72 due to the passage of the SECURE Act 2.0 in December 2022. It is scheduled to increase again to 75 in 2033.
Technically RMDs are due every December 31, but the IRS allows you to delay the first withdrawal. If you take this route, you'll have to take a second RMD before December 31. Taking two RMDs in one year creates two taxable events â and might even push you into a higher tax bracket.
Example:
After turning 73 in 2025, you can take your first RMD in 2025 or delay it until April 1st of 2026. You still need to take your second RMD by December 31, 2026, and withdraw RMDs every calendar year after that by December 31.
How RMDs are Calculated
Calculating your RMD follows these steps based on IRS guidelines:
- Determine the individual retirement account balance as of December 31 of the prior year
- Find the distribution period (or "life expectancy") that corresponds to your age on the appropriate IRS table
- Divide step 1 by step 2 to determine your RMD amount
Which IRS Table to Use:
- Married to a spouse less than ten years younger: Use the IRS Uniform Lifetime Table
- Married to a spouse over ten years younger (sole beneficiary): Use the IRS Joint Life and Last Survivor Expectancy Table
What Retirement Accounts do RMDs Apply to?
Most tax-advantaged and defined contribution retirement accounts impose RMD requirements:
Accounts Subject to RMDs:
- Traditional IRAs
- SEP IRAs
- SIMPLE IRAs
- Rollover IRAs
- Traditional 401(k) plans
- Most 403(b) and 457(b) plans
- Variable annuities held in an IRA
- Profit-sharing plans
Notable Exception:
Roth IRAs don't require RMDs during the owner's lifetime, as these are funded with after-tax dollars.
What Happens If You Don't Take RMDs?
As the "R" in RMD stands for "required," there are penalties for failing to take your distributions.
Penalty Structure:
- 25% excise tax on the undistributed amount
- Reduced to 10% if corrected within a two-year "correction window"
Example: If you fall short by $1,000, you could owe $250 in penalties.
RMDs and Taxes
The IRS enforces RMDs to ensure that taxpayers don't skip out on their tax obligations. Since the money in these accounts has been tax-deferred for decades, Uncle Sam hasn't taken his cut.
Generally, RMDs are taxed as ordinary income at the state and federal levels. Withdrawals count toward your total taxable income for the year in question. Be careful: if you're working or withdrawing from other accounts, RMDs may push you into a higher tax bracket.
Minimizing Taxes on RMDs
Roth Accounts Strategy:
Consider Roth IRAs and Roth 401(k)s, which tax contributed funds upfront, meaning there are rarely back-end taxes to worry about.
Qualified Charitable Distribution (QCD):
Donate your entire RMD to charity. QCDs satisfy your RMD requirement and lower your tax bill while benefiting charity.