1. What is the RMD Calculation?

The Required Minimum Distribution (RMD) is the minimum amount you must withdraw annually from your retirement accounts once you reach the age of 72 (or 70½ if you were born before July 1, 1949). The calculation divides your account balance by a life expectancy factor from IRS tables.

2. How Does the Calculator Work?

The calculator uses the RMD equation:

Where:

• \( Account\ Balance \) — Total balance of retirement account (USD)
• \( Life\ Expectancy\ Factor \) — Factor from IRS life expectancy tables (unitless)

Explanation: The equation determines the minimum amount that must be withdrawn each year from tax-deferred retirement accounts to avoid penalties.

3. Importance of RMD Calculation

Details: Proper RMD calculation is crucial to avoid IRS penalties (50% of the amount that should have been withdrawn). It ensures compliance with tax laws while managing retirement income.

4. Using the Calculator

Tips: Enter your total retirement account balance in USD and the appropriate life expectancy factor from IRS tables. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: When must I start taking RMDs?
A: Generally by April 1 following the year you turn 72 (or 70½ if born before July 1, 1949), then by December 31 each subsequent year.

Q2: Where do I find my life expectancy factor?
A: IRS Publication 590-B provides life expectancy tables based on your age and beneficiary situation.

Q3: What accounts require RMDs?
A: Traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, and other tax-deferred retirement accounts.

Q4: Can I withdraw more than the RMD?
A: Yes, you can always withdraw more than the required minimum, but not less.

Q5: What happens if I don't take my RMD?
A: The IRS imposes a 50% excise tax on the amount not distributed as required.