1. What is Required Minimum Distribution (RMD)?

RMD is the minimum amount you must withdraw annually from your retirement accounts (like 401(k)s and IRAs) starting at age 72 (or 73 if you reach age 72 after Dec 31, 2022). The IRS provides life expectancy tables to determine your distribution period factor.

2. How Does the RMD Calculator Work?

The calculator uses the RMD formula:

Where:

• Account Balance — Your retirement account balance as of December 31 of the previous year
• Distribution Period Factor — From IRS life expectancy tables based on your age

Explanation: The calculation divides your account balance by a life expectancy factor to determine your minimum required withdrawal for the year.

3. Importance of RMD Calculation

Details: Calculating your RMD correctly is crucial to avoid IRS penalties (25% of the amount not withdrawn). RMDs ensure you withdraw and pay taxes on your retirement savings during your lifetime.

4. Using the Calculator

Tips: Enter your account balance in dollars and your distribution period factor from the IRS Uniform Lifetime Table. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: When must I take my first RMD?
A: By April 1 of the year after you turn 72 (or 73 if born after 1950). Subsequent RMDs are due by December 31 each year.

Q2: Where do I find my distribution period factor?
A: Use IRS Publication 590-B, Appendix B (Uniform Lifetime Table) for most taxpayers.

Q3: What accounts require RMDs?
A: Traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, and other defined contribution plans.

Q4: Can I withdraw more than my RMD?
A: Yes, you can always withdraw more than the required minimum.

Q5: What happens if I don't take my RMD?
A: The IRS imposes a 25% penalty on the amount not withdrawn (reduced to 10% if corrected within 2 years).