Required Minimum Distribution (RMD) Calculator
This calculator helps you determine your Required Minimum Distribution (RMD) from an IRA, 401(k), or other retirement account. It's designed for individuals who need to withdraw a minimum amount annually after reaching a certain age, as mandated by the IRS.
RMD Calculator
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Data Source and Methodology
All calculations are strictly based on the IRS guidelines for Required Minimum Distributions. For precise calculations, please refer to the IRS website. All calculations are based rigorously on the formulas and data provided by this source.
The Formula Explained
The RMD for any year is calculated by dividing the retirement account's prior year-end fair market value by the applicable distribution period or life expectancy. The formula is: RMD = Account Balance / Life Expectancy Factor.
Glossary of Terms
- Account Balance: The value of your retirement account at the end of the previous year.
- Life Expectancy Factor: A figure from the IRS life expectancy tables used to calculate RMD.
Frequently Asked Questions (FAQ)
What is an RMD?
An RMD is the minimum amount you must withdraw from your retirement accounts each year.
When do I need to start taking RMDs?
You must start taking RMDs by April 1 of the year following the year you reach age 72.
Can I withdraw more than my RMD?
Yes, you can always withdraw more than your RMD, but remember that these withdrawals are taxable.
What if I don't take my RMD?
If you don't take your RMD, you may have to pay a 50% excise tax on the amount not distributed as required.
Can I combine RMDs from multiple accounts?
RMDs must be calculated separately for each account, but you can withdraw the total sum from one or more IRAs.