1. What is Required Minimum Distribution?

Required Minimum Distribution (RMD) is the minimum amount you must withdraw from your retirement account each year starting at age 72 (or 73 if you reach age 72 after Dec 31, 2022). The IRS requires these withdrawals to ensure tax-deferred retirement accounts are eventually taxed.

2. How RMD Calculation Works

The calculator uses the standard RMD formula:

Where:

• Account Balance — The value of your IRA account as of December 31 of the previous year
• Distribution Period — Life expectancy factor from IRS Uniform Lifetime Table

Explanation: The distribution period is based on your age and comes from IRS life expectancy tables. The older you are, the smaller the distribution period, resulting in larger RMD amounts.

3. Importance of RMD Calculations

Details: Calculating RMD accurately is crucial to avoid IRS penalties (25% of the amount not withdrawn). RMDs affect your taxable income and retirement tax planning.

4. Using the Calculator

Tips: Enter your IRA account balance in USD and the distribution period from IRS tables. The calculator will determine your minimum required withdrawal amount for the year.

5. Frequently Asked Questions (FAQ)

Q1: When must I start taking RMDs?
A: Generally April 1 following the year you turn 72 (or 73 if born after 1950), then by December 31 each subsequent year.

Q2: Where do I find my distribution period?
A: IRS Publication 590-B provides Uniform Lifetime Tables based on your age.

Q3: Can I withdraw more than the RMD?
A: Yes, you can always withdraw more than the minimum required amount.

Q4: 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A: The IRS imposes a 25% penalty on the amount not withdrawn (reduced to 10% if corrected within 2 years).

Q5: Are RMDs required for Roth IRAs?
A: No, Roth IRAs don't require RMDs during the owner's lifetime.