Comprehensive Guide
Learn more in our Investing Guide.
How it works
Required Minimum Distributions force traditional IRA and 401(k) money out on a schedule set by dividing the prior December 31 balance by a life-expectancy divisor from the IRS Uniform Lifetime Table — 25-ish in your mid-seventies, shrinking toward single digits by your nineties, which pushes forced payouts from roughly four percent of the account toward twelve percent and beyond. Because the table changes with legislation and individual situations differ (much-younger spouses use a different table, still-working 401(k) money may defer), this estimator keeps the divisor in YOUR hands: enter the figure for your age, get the implied payout instantly, then project forward as balances grow and divisors step down each year. Ten years out on the default inputs, the schedule shows annual withdrawals compounding past the starting figure even after the account bleeds distributions. Roth IRAs carry no lifetime RMDs for owners, QCDs can redirect taxable distributions after 70½ toward charity, and missed deadlines draw steep excise penalties — mechanics worth knowing even though this stays an educational projection rather than a compliance calculation.Formula
RMD = prior Dec 31 balance ÷ table divisor | Next balance = (balance − RMD) × (1 + growth) | Divisor steps down each year
Tips
- Use the December 31 balance from LAST year — this year's moves do not count yet.
- Multiple IRAs may aggregate for the withdrawal but 401(k)s cannot mix in.
- QCDs after age 70½ satisfy RMDs tax-free up to annual charity limits.
- Withhold extra federal tax on the December payment instead of quarterly estimates.
- Missed or short RMDs draw steep excise penalties — automate the December deadline.
Frequently asked questions
How do I calculate my RMD?
Take the account balance from last December 31 and divide by the Uniform Lifetime Table divisor for your age this year. A $750,000 balance at 75 divided by about 24.6 yields roughly $30,500. Your custodian computes it too, but knowing the math keeps them honest.
What age do RMDs currently start?
For most people born in 1951–1959, the first RMD is due April 1 following the year they turn 73, moving to 75 for those born in 1960 or later. Delaying the first payment into April stacks TWO distributions in one tax year — often worth avoiding.
Do Roth IRAs have required minimum distributions?
Not for the original owner — Roth IRAs carry zero lifetime RMDs entirely. Inherited accounts differ sharply: most post-2020 beneficiaries must empty within 10 years while eligible spouses can stretch over life. Model survivors separately rather than assuming owner rules carry over.
What happens if I miss an RMD or take too little?
The shortfall faces a steep IRS excise tax — historically 50% and reduced to 25% (or 10% if corrected quickly) under newer rules. Correct the withdrawal promptly and file the penalty form; custodians report distributions but enforcement follows you, not them.
Are RMDs taxed as ordinary income?
Yes — traditional-account distributions land on top of other income at ordinary rates. A $30,500 RMD stacking onto a pension can push brackets higher and lift Medicare IRMAA surcharges two years later. Qualified charitable distributions and earlier conversions are the standard pressure valves.