Required Minimum Distribution (RMD): Generally, the IRS requires that distributions must begin upon the owner's attainment of age 70½ from qualified plans and IRAs (excluding Roth IRAs). For qualified plans, the required distribution may be deferred until retirement if the employee continues to work beyond age 70½. However, distributions from IRAs must begin once age 70½ is attained.
Determining Your RMD: Generally speaking, your RMD is calculated by dividing your retirement account balance on December 31 of the prior year by your applicable life expectancy factor. Recent regulations provide that everyone determines the factor by using your age and the Uniform Lifetime Table. The only exception to the Uniform Lifetime Table is if a spouse, who is more than 10 years younger than the account owner, is the sole beneficiary. If this is the case, the Joint Life and Last Survivor Expectancy Table is used to determine the factor.
This calculator should not be used to calculate RMDs from inherited accounts, as different calculation rules apply.
If you do not take withdrawals, or you take less than you should, you may owe a 50% federal penalty tax on the difference between the amount you withdrew and the amount you should have withdrawn. And, you may still have to withdraw the required amount and pay income tax due on the taxable event. Refer to IRS Publication 590 or your tax adviser for help in determining how much of your distribution will be taxable.