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 factors to calculate these mandatory distributions.

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 (2025 values)

Explanation: The IRS provides different life expectancy tables depending on your situation (Uniform Lifetime Table for most account owners, Joint and Last Survivor Table if your spouse is your sole beneficiary and more than 10 years younger, and Single Life Table for beneficiaries).

3. Importance of RMD Calculation

Details: Calculating RMD correctly is crucial to avoid IRS penalties (25% of the amount that should have been withdrawn). RMDs ensure retirement accounts are eventually taxed after decades of tax-deferred growth.

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 for 2025
• For inherited IRAs, use the Single Life Expectancy Table based on the beneficiary's age

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: What accounts are subject to 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, but the excess doesn't count toward future years' RMDs.

Q4: What happens if I don't take my RMD?
A: The IRS imposes a 25% penalty on the amount not withdrawn (reduced from 50% under SECURE 2.0 Act).

Q5: Are RMDs taxable?
A: Yes, RMDs from traditional retirement accounts are generally taxable as ordinary income, except for any after-tax contributions.