Required Minimum Distribution (RMD) Calculator Formula
Understand the math behind the required minimum distribution (rmd) calculator. Each variable explained with a worked example.
Formulas Used
Required Minimum Distribution
rmd_amount = account_balance / life_expectancyDistribution Factor
distribution_factor = life_expectancyRMD as % of Balance
rmd_pct = 100 / life_expectancyVariables
| Variable | Description | Default |
|---|---|---|
account_balance | Account Balance (Dec 31)(USD) | 500000 |
age | Age This Year(years) | 75 |
life_expectancy | Derived value= age <= 73 ? 26.5 : (age <= 75 ? 24.6 : (age <= 80 ? 20.2 : (age <= 85 ? 16.0 : (age <= 90 ? 12.2 : 8.6)))) | calculated |
How It Works
Required Minimum Distributions
RMD = Account Balance / Distribution Period
Starting at age 73 (SECURE 2.0 Act), you must withdraw minimum amounts from Traditional IRAs and 401(k)s each year.
Approximate Distribution Periods
Worked Example
$500,000 balance at age 75.
- 01Distribution period at 75 = 24.6
- 02RMD = $500,000 / 24.6 = $20,325
- 03RMD as % = 100 / 24.6 = 4.07%
Frequently Asked Questions
When do RMDs start?
Under the SECURE 2.0 Act, RMDs begin at age 73 for those born between 1951-1959, and age 75 for those born in 1960 or later.
What happens if I do not take my RMD?
The penalty for missing an RMD is 25% of the amount not withdrawn (reduced from 50% by SECURE 2.0). It drops to 10% if corrected within 2 years.
Do Roth IRAs have RMDs?
No. Roth IRAs do not have RMDs during the owner's lifetime. This is a major advantage of Roth accounts for estate planning.
Ready to run the numbers?
Open Required Minimum Distribution (RMD) Calculator