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 70½ if you reached that age before January 1, 2020). The IRS requires these withdrawals to ensure tax-deferred retirement savings are eventually taxed.

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
• Life Expectancy Factor — From IRS Uniform Lifetime Table based on your age

Explanation: The IRS provides life expectancy tables to determine your distribution period. For most retirees, you'll use the Uniform Lifetime Table.

3. Importance of RMD Calculation

Details: Calculating your RMD correctly is crucial because failing to take the full RMD can result in a hefty IRS penalty - 50% of the amount that should have been withdrawn.

4. Using the Calculator

Tips:

• Enter your account balance as of December 31 of the previous year
• Find your life expectancy factor from the IRS Uniform Lifetime Table
• The calculator will determine your minimum required distribution for the year

5. Frequently Asked Questions (FAQ)

Q1: When must I take my first RMD?
A: You must take your first RMD by April 1 of the year after you turn 72 (or 70½ if born before July 1, 1949). Subsequent RMDs are due by December 31 each year.

Q2: Which retirement accounts require RMDs?
A: Traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, 457(b)s, and other defined contribution plans. Roth IRAs don't require RMDs during the owner's lifetime.

Q3: Can I withdraw more than the RMD?
A: Yes, you can always withdraw more than the required minimum. The RMD is just the minimum you must withdraw to avoid penalties.

Q4: What if I have multiple retirement accounts?
A: For IRAs, you can take the total RMD from one or more IRAs. For 401(k)s, you must calculate and take RMDs separately for each account.

Q5: Are RMDs taxable?
A: Yes, RMDs from traditional retirement accounts are generally taxable as ordinary income in the year you take them.