Find the minimum you must withdraw this year from a traditional IRA or workplace retirement plan, and see how your balance and withdrawals could run over time.
Money in a traditional IRA or a workplace plan such as a 401(k) has not yet been taxed. The IRS does not let it sit there forever, so once you reach a set age it requires you to withdraw a minimum amount each year, and you pay income tax on what you take. That amount is your required minimum distribution, or RMD. You can always withdraw more, but never less.
Take your account balance on December 31 of the previous year, then divide it by a distribution period from an IRS table that depends on your age. The older you are, the smaller the period and the larger the share of the account you must take. Most people use the Uniform Lifetime Table. If your spouse is your only beneficiary and is more than 10 years younger, the Joint Life and Last Survivor table applies, which gives a longer period and a smaller RMD. Both tables come from IRS Publication 590-B.
The starting age is 73 for people born from 1951 through 1959, and 75 for those born in 1960 or later. Your first RMD is for the year you reach that age, but you may wait until April 1 of the following year to take it. If you do, you must also take that second year's RMD by December 31, which means two taxable withdrawals in one year. After that, each year's RMD is due by December 31.
If you enter an expected return, the calculator assumes you take only the RMD each year, at year end, and that the rest of the balance grows at that rate. It runs from your current age up to 120 and shows the distribution period, withdrawal and remaining balance for every year. Leave the return blank to see just this year's RMD.
A required minimum distribution, or RMD, is the smallest amount the IRS makes you withdraw each year from most tax-deferred retirement accounts once you reach a certain age. It is your account balance at the end of the previous year divided by a distribution period from an IRS table.
Under the current rules, RMDs start at age 73 if you were born from 1951 through 1959, and at age 75 if you were born in 1960 or later. Your first RMD can be delayed until April 1 of the year after you reach that age, but then you must take two distributions in that year.
Most people use the Uniform Lifetime Table. If your spouse is your only beneficiary and is more than 10 years younger than you, the Joint Life and Last Survivor Expectancy Table applies instead, which gives a longer distribution period and a smaller required withdrawal.
Traditional, SEP and SIMPLE IRAs and most workplace plans such as 401(k), 403(b) and 457(b) plans have RMDs. Roth IRAs do not require withdrawals during the owner's lifetime. If you have several accounts, calculate each one separately.
The IRS charges an excise tax on the amount you failed to withdraw. The rate is 25%, and it can fall to 10% if you correct the shortfall promptly. The penalty can sometimes be waived for a reasonable error.
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