RMD Calculator
Once you reach a certain age, the IRS requires that you begin taking withdrawals from your retirement accounts—these are called Required Minimum Distributions (RMDs). If you have a traditional IRA, 401(k), 403(b), or other tax-deferred retirement accounts, you’ll need to start calculating and withdrawing your RMDs annually.
As of 2025, most retirees must begin taking RMDs at age 73, thanks to recent updates from the SECURE 2.0 Act. Miscalculating your RMD can result in steep penalties—as high as 25% of the amount you should have withdrawn. That’s why it’s crucial to understand how to calculate your RMD properly or use a trusted RMD calculator.
How to Use an RMD Calculator
A good Required Minimum Distribution (RMD) calculator takes the complexity out of IRS rules and helps you estimate your annual withdrawal with just a few key inputs:
- Your age at the end of the tax year
- Your retirement account balance as of December 31 of the previous year
- The appropriate IRS life expectancy factor, usually from the Uniform Lifetime Table
The basic formula used in any RMD calculator is:
RMD = Account Balance ÷ Life Expectancy Factor
For example, if you’re 73 and your IRA balance at the end of the previous year was $400,000, your life expectancy factor from the IRS Uniform Lifetime Table is 26.5. The calculator would divide $400,000 by 26.5, giving you an RMD of about $15,094 for the current year.
Types of IRS Tables
Most people use the Uniform Lifetime Table, but there are two other tables that may apply in special cases:
- Joint Life and Last Survivor Table: If your spouse is more than 10 years younger and is your sole beneficiary, this table may give you a higher life expectancy factor (meaning a lower RMD).
- Single Life Table: Used primarily for inherited IRAs.
A robust calculator will help you choose the correct table based on your unique situation, ensuring your withdrawal estimate is accurate and IRS-compliant.
New RMD Rules and Age Changes
The rules around Required Minimum Distributions have changed significantly in recent years, thanks to the passage of the SECURE 2.0 Act in late 2022. One of the most notable updates is the increase in the starting age for RMDs, giving retirees more flexibility and time to let their retirement accounts grow tax-deferred.
Updated RMD Start Ages
- Age 73 for individuals who turn 73 between 2023 and 2032
- Age 75 for individuals born in 1960 or later
Before SECURE 2.0, the RMD age was 72 (raised from 70½ by the original SECURE Act in 2020). The latest change provides an extended deferral window—potentially allowing retirees to better plan Roth conversions, manage tax brackets, or delay taxable income.
For example, if you were born in 1952 and turn 73 in 2025, you’ll need to take your first RMD by April 1, 2026, and your second RMD by December 31, 2026. After that, RMDs are due annually by the end of each calendar year.
Annual Deadlines and Penalties
Once your RMDs begin, you must withdraw the correct amount every year by December 31 (except for the first RMD, which can be delayed until April 1 of the following year). Missing the deadline or withdrawing too little can trigger IRS penalties of up to 25% of the shortfall—though this may be reduced to 10% if corrected promptly.
Inherited IRAs: Special Rules
The SECURE Act also introduced sweeping changes for inherited IRAs. Most non-spouse beneficiaries who inherit an IRA after 2019 must now fully deplete the account within 10 years of the original account holder’s death. This eliminates the old “stretch IRA” strategy and can lead to larger taxable withdrawals over a shorter timeframe.
However, spouse beneficiaries typically have more flexibility. They may:
- Roll the account into their own IRA and delay RMDs until their own RMD age
- Remain as the beneficiary and delay RMDs until the deceased spouse would have turned 73
- Use the more favorable Joint Life Expectancy Table if they are more than 10 years younger
How RMD Percentages Are Determined
Each year, the IRS publishes the Uniform Lifetime Table, which shows your distribution factor based on your age. Your RMD is calculated using this formula:
Account Balance ÷ IRS Life Expectancy Factor = RMD
At age 73, the divisor is 26.5, which equates to roughly 3.77% of your account. This percentage increases each year, reflecting your shortened life expectancy.
| Age | Divisor | RMD % |
| 73 | 26.5 | ~3.77% |
| 75 | 24.6 | ~4.07% |
| 80 | 18.7 | ~5.35% |
These numbers can help you estimate how much you’ll need to withdraw and budget for taxes.
Common RMD Mistakes to Avoid
Even experienced investors can slip up when managing Required Minimum Distributions. With IRS rules shifting and different account types to consider, it’s easy to make an error that can lead to unnecessary taxes or penalties. Here are some of the most common—and costly—RMD mistakes to watch out for:
- Missing your RMD deadline, triggering a 25% excise tax (reduced to 10% if corrected promptly)
- Combining RMDs improperly across different account types—IRAs can be aggregated, 401(k)s cannot
- Using outdated life expectancy tables, which can lead to underpayment
- Forgetting inherited IRA rules, especially under the 10-year withdrawal rule
Keeping up with changing IRS rules and using an accurate RMD calculator can help prevent these issues.
Using RMDs in Retirement Planning
RMDs don’t just affect your retirement accounts—they can have ripple effects on your broader tax and income strategy:
- RMDs increase taxable income, which may push you into a higher tax bracket
- They can affect Social Security taxation and Medicare premiums
- Strategic Roth conversions before RMD age can help reduce future RMDs
- Compare your RMD to the 4% retirement withdrawal rule—some years your RMD might exceed 4%
A well-planned RMD strategy ensures that you maintain income, minimize taxes, and preserve wealth.
Conclusion & Tools
Calculating your RMD doesn’t have to be complicated. A reliable RMD calculator takes the guesswork out of the process and ensures you stay compliant with IRS rules. Whether you’re age 73 or planning ahead, it’s a smart move to revisit your RMD strategy each year. If you need further assistance with RMDs, contact Dimov Tax today for professional assistance.
FAQs
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