RMD Calculator Required Minimum Distribution
RMD Calculator
RMD Parameters
Your current age: 75
Check if spouse is sole beneficiary and 10+ years younger
Used to project future account balances
Your RMD for 2025
Your Required Minimum Distribution
$0.00
Distribution period: 0 years
RMD Calculation
Account Balance
$200,000.00
Distribution Period
0
Required Minimum Distribution
$0.00
Important Deadline
You must withdraw your RMD by December 31, 2025. First-time RMDs can be delayed until April 1 of the following year, but this means taking two distributions in one year.
What are Required Minimum Distributions (RMDs)?
A Required Minimum Distribution (RMD) is the minimum amount the IRS mandates you to withdraw from certain tax-deferred retirement accounts each year. 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 on the distribution. Note that RMDs are just that: required minimum distributions—if you need to pull more money from your accounts after reaching retirement age, you can.
Why RMDs Exist
The IRS enforces RMDs to ensure that taxpayers don't skip out on their tax obligations. Since the money in tax-deferred accounts has been growing without taxation for decades, Uncle Sam hasn't taken his cut. By requiring RMDs, the government creates a "taxable event" and finally collects taxes on money that has been tax-deferred for years or even decades.
Age 73
Current RMD age requirement (increased from 72 by SECURE Act 2.0 in 2022)
Age 75 (2033)
Scheduled to increase again to age 75 starting in 2033
25% Penalty
Tax penalty on amounts not withdrawn (reducible to 10% if corrected within 2 years)
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. Prior to 2019, the RMD age was 70½, then it was increased to 72 by the SECURE Act in 2019.
RMD Timeline
First RMD Deadline
Due by April 1 of the year after you turn 73. The IRS allows you to delay your first withdrawal, but be careful—taking this route means you'll have to take a second RMD before December 31 of the same year. Taking two RMDs in one year creates two taxable events and might even push you into a higher tax bracket.
Annual RMD Deadline
For every calendar year after you take your first distribution, you must withdraw your entire RMD by December 31. This deadline offers flexibility in determining when and how much you withdraw throughout the year, as long as you meet your RMD amount by year-end.
Example Timeline
After turning 73 in 2025, you can take your first RMD in 2025 or delay it until April 1, 2026. However, you still need to take your second RMD by December 31, 2026, and withdraw RMDs every calendar year after that by December 31.
How to Delay RMD Deadlines
Besides delaying your first withdrawal until April 1, another way to delay your RMD is by continuing employment at the company that sponsors your retirement account after your 73rd birthday.
Important: Assuming you own less than 5% of the company, you can delay your first RMD until retirement. However, you'll still have to take RMDs from any other retirement accounts (like IRAs), and once you leave the company, the RMD mandate kicks in for that account too.
How RMDs are Calculated
Calculating your RMD follows a straightforward process based on IRS guidelines. However, the exact IRS table you'll need depends on your marital or inheritance situation.
RMD Calculation Steps
Determine account balance as of December 31 of the prior year
Find the distribution period (life expectancy) that corresponds to your age on the appropriate IRS table
Divide Step 1 by Step 2 to determine your RMD amount
IRS Uniform Lifetime Table
Use this table if:
- • You're married to a spouse less than 10 years younger
- • You're single
- • Your spouse is not your sole beneficiary
This is the most commonly used table for RMD calculations.
Joint Life Expectancy Table
Use this table if:
- • You're married to a spouse more than 10 years younger
- • Your spouse is your sole beneficiary
This table provides longer distribution periods, resulting in lower annual RMDs.
Note: While it's possible to calculate your RMD by hand using IRS Publication 590-B, our calculator simplifies the process. Just input the required information and we'll do the calculations based on the appropriate IRS table for your situation.
What Retirement Accounts Require RMDs?
Most tax-advantaged and defined contribution retirement accounts impose RMD requirements. Understanding which accounts are subject to RMDs is crucial for proper retirement planning.
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 (qualified annuities)
- •Profit-sharing plans
- •Small business retirement accounts
Notable Exception: Roth IRAs
Roth IRAs don't require RMDs during the owner's lifetime, as these are funded with after-tax dollars. This is one of the major advantages of Roth IRAs.
However, Roth 401(k)s technically require RMDs, but you can roll over that 401(k) to a Roth IRA, which eliminates RMDs altogether.
Note: Inherited Roth IRAs have different rules and may require distributions within 10 years for non-spouse beneficiaries.
Do I Calculate RMD for Every Account?
Yes. If you have several retirement accounts, you'll need to calculate your RMDs for each account individually. However, you may be able to combine your total RMD and withdraw a consolidated distribution from one or more accounts of the same type.
Traditional IRAs: Calculate separately, but can withdraw total from one or several traditional IRA accounts
401(k)s: Must calculate and withdraw separately for each account
403(b)s: Calculate separately, but can withdraw total from one or several 403(b) accounts
Inherited accounts: Cannot be combined with other inherited accounts from different people
Important: Taking withdrawals from a Roth IRA never satisfies RMD requirements because those withdrawals aren't taxed. Additionally, pulling out more than your required minimum distribution doesn't reduce your RMD obligation for future years.
Penalties, Taxes, and Strategies
What Happens If You Don't Take RMDs?
As the "R" in RMD stands for "required," there are significant penalties for failing to take your distributions.
Standard Penalty: 25% Excise Tax
The IRS charges a 25% excise tax on the undistributed amount. If you fall short of your annual RMD by $1,000, $250 of the shortfall will incur a tax payable to the IRS as a penalty.
Reduced Penalty: 10% (If Corrected)
If the mistake is corrected during a two-year "correction window," the penalty can be reduced to 10%. This provides some relief for those who act quickly to fix the error.
RMDs and Taxes
Generally, RMDs are taxed as ordinary income at both state and federal levels. Withdrawals count toward your total taxable income for the year in question.
Tax Bracket Warning: If you're working or withdrawing from other accounts, RMDs may push you into a higher tax bracket. Plan your withdrawals carefully to minimize tax impact.
Strategy: Roth Conversions
Convert Traditional IRA assets to Roth IRA before reaching RMD age to avoid future RMDs.
- ✓ Pay taxes now at potentially lower rates
- ✓ No RMDs on Roth IRAs during your lifetime
- ✓ Tax-free growth and withdrawals in retirement
Strategy: Qualified Charitable Distributions (QCD)
Donate your entire RMD directly to charity to satisfy RMD and lower your tax bill.
- ✓ Satisfies RMD requirement
- ✓ Not counted as taxable income
- ✓ Up to $105,000 per year (2024 limit)
- ✓ Benefits charity while reducing tax burden
Brokerage Reporting Requirements
The IRS requires brokerage firms, custodians, and trustees to offer to calculate RMDs for account holders. However, the IRS also stipulates that RMD calculations and withdrawals are ultimately the taxpayer's responsibility.
If your brokerage makes a mistake, you can still be held liable for any penalties. While it's possible to get penalties waived for "reasonable errors," there's no guarantee. That's why we recommend calculating your own RMDs for each account every year—just to be on the safe side.
Inherited RMDs
When you inherit a retirement account with RMDs like an IRA, the rules vary significantly based on your relationship with the original owner and the type of account. These rules became more complex after the SECURE Act of 2019.
Ten Year Distribution Rule
Post-2019, non-spouse beneficiaries must distribute the full amount of the IRA within ten years after the original account holder's death. The SECURE Act of 2019 mostly eliminated the option for non-spouse IRA inheritors to stretch IRA withdrawals based on their own life expectancy.
Exceptions for Eligible Designated Beneficiaries:
- • Surviving spouses
- • Minor children (until reaching majority age)
- • Disabled or chronically ill persons
- • Persons less than ten years younger than the original account owner
These individuals may delay or stretch RMDs, though the length of time varies by category.
Inheriting IRAs as a Spouse
Spouses have the most flexibility when inheriting an IRA. They can:
- •Roll into their own IRA: Continue saving and delay RMDs until they turn 73
- •Use an Inherited IRA: Delay RMDs until December 31 of the year after spouse's death (if spouse was over 73) or until the spouse would have turned 73 (if under 73)
Inheriting Roth IRAs
As a Spouse: Can assume inherited Roth IRAs as their own without minimum distribution requirements. Rolling over quickly is usually the best strategy.
As a Non-Spouse: Must follow the SECURE Act's ten-year rule. However, since withdrawals are tax-free, the impact is less severe than with traditional IRAs.
Inherited 401(k) Complexity
The rules for inheriting a 401(k) are more complex and vary by plan policies and state laws. Options may include leaving funds in the plan, immediate removal, five-year distributions, or rolling into an Inherited IRA. For larger estates, consult a financial advisor or attorney specializing in inheritance laws.
Key Takeaways
✓ Start at Age 73
RMDs begin at 73 (increasing to 75 in 2033)
✓ December 31 Deadline
Annual RMDs must be withdrawn by year-end
✓ Calculate for Each Account
Individual calculations required, some can be aggregated
✗ 25% Penalty for Failure
Severe penalties apply if RMDs are not taken
✓ Roth IRAs Exempt
No RMDs during owner's lifetime for Roth IRAs
✓ QCD Strategy Available
Donate RMD to charity to reduce tax burden
Remember: RMDs are a critical aspect of retirement planning. Missing an RMD can result in substantial penalties, while properly managing them can help optimize your tax situation. Use this calculator annually to stay on top of your required distributions, and consider working with a financial advisor to develop strategies like Roth conversions or qualified charitable distributions to minimize your tax burden in retirement.