Retirement accounts such as traditional IRAs and 401(k)s grow tax-deferred until you begin withdrawing funds. Once you reach your early seventies, the IRS requires you to take annual withdrawals known as required minimum distributions (RMDs). Failing to withdraw the correct amount can lead to hefty penalties, so accurate calculations are essential. The RMD amount changes with age because it is based on your remaining life expectancy, which declines each year according to the IRS Uniform Lifetime Table.
The core formula is elegantly simple. Divide your prior year's ending account balance by a life expectancy factor tied to your age. In MathML notation:
Here is your account balance, and is the factor from the IRS table. As you age, the factor decreases, meaning a larger portion of your account must be withdrawn each year. This calculator uses the 2022 Uniform Lifetime Table, which raised factors slightly from the prior version and applies to most account owners. Different tables exist for certain beneficiaries, but this simplified approach suits the vast majority of retirees.
Enter your current age and the value of your retirement account at the end of last year. The calculator looks up the corresponding factor and divides your balance by that number. For example, a 75-year-old with $500,000 would divide by a factor of 24.6, resulting in an RMD of about $20,325. The results appear instantly under the form.
The following table shows several factors from the IRS Uniform Lifetime Table. The full table continues beyond age 100, but this subset covers typical retirement years:
| Age | Factor |
|---|---|
| 72 | 27.4 |
| 75 | 24.6 |
| 80 | 20.2 |
| 85 | 16.0 |
| 90 | 12.2 |
| 95 | 8.9 |
| 100 | 6.4 |
These factors represent how many more years the IRS expects you to live. Each year you divide by a smaller factor, meaning the percentage of your account withdrawn gradually increases. The last factor at age 120 and above is 2.0, indicating that nearly half of the account must be withdrawn annually.
Although RMDs may feel like a burden, they also present an opportunity to manage your taxable income. Some retirees withdraw more than the minimum to level out taxes over time or to rebalance investments. Others convert a portion of funds to a Roth account before RMD age to reduce future distributions. Because retirement strategies are highly individual, consider consulting a financial adviser to coordinate RMDs with Social Security benefits and other income sources.
Imagine Linda, age 74, holds $350,000 in her traditional IRA. According to the table, her factor is 25.5. Dividing 350,000 by 25.5 gives an RMD of roughly $13,725. Linda plans to withdraw slightly more so she can also cover a large vacation. Next year, at age 75, her factor will drop to 24.6, requiring a minimum distribution of about $14,228 assuming the account balance stays the same. By running these numbers in advance, she can make sure there is enough cash set aside and avoid scrambling at year-end.
RMDs are taxed as ordinary income, so they can push you into higher tax brackets if not managed carefully. Charitable IRA distributions are one strategy to offset taxes by donating part of your RMD directly to a qualified charity. This counts toward the RMD but is excluded from taxable income. Another tactic is spreading withdrawals throughout the year instead of taking one large lump sum. The calculator assists with projecting the annual amount so you can evaluate different timing strategies.
Several situations require adjustments to the basic formula. If your spouse is more than ten years younger and is the sole beneficiary, a different set of factors applies. Also, inherited IRAs for non-spouse beneficiaries follow the Single Life Table or the new 10-year distribution rules. This tool focuses on the standard case, so it may not cover every nuance. Nonetheless, it provides a reliable baseline for most retirees planning their first or ongoing RMDs.
Keep records of each year's RMD calculation, including the account balance and factor used. Many custodians provide an annual notice with the RMD amount, but ultimately you are responsible for ensuring the correct withdrawal. By using this calculator and keeping a log, you can demonstrate compliance in the event of an IRS inquiry. Software or spreadsheets can automate reminders so you never miss a deadline.
Understanding required minimum distributions is a key part of managing retirement savings. While the formula may seem straightforward, the long-term impact on your financial plan can be significant. Use this calculator as often as needed to plan your withdrawals. Adjust as your account balance fluctuates or as tax laws change. With careful attention, you can satisfy IRS rules while making the most of your hard-earned nest egg.
Estimate the carbon footprint payback when replacing an old laptop with a newer, energy-efficient model.
Use our Capital Gains Tax Calculator to quickly estimate taxes on your investment sales. Enter purchase price, sale price, and holding period to see the difference between short-term and long-term rates.
Estimate total podcast expenses from equipment, editing, hosting and marketing to see how much your series will cost.