A Simple Guide to Calculating Required Minimum Distributions (RMDs)

November 5, 2024

Required Minimum Distributions (RMDs) are the minimum amounts individuals must withdraw annually from retirement accounts like traditional IRAs, starting at a certain age. Here’s a concise guide on how to calculate RMDs and stay compliant with IRS rules.


RMDs for traditional IRAs must begin when the account holder turns 73, following the SECURE 2.0 Act (2023). Before this, the RMD age was 72 under the SECURE Act of 2019 and 70½ under earlier rules. The first RMD can be delayed until April 1 of the following year, but after that, all RMDs must be taken by December 31 each year.

How to Calculate Your RMD in 5 Steps

#1: Identify the Distribution Year

The year the individual turns 73 is the first year they must take an RMD. The first RMD can be delayed to April 1 of the following year, but after that, the RMD must be taken by December 31 each year.

#2: Find the Account Balance

The balance used for the RMD calculation is the account value as of December 31 of the previous year. Any rollovers or transfers into the account should be included in this balance.

#3: Look Up the Life Expectancy Factor

The IRS provides a Uniform Lifetime Table to find the life expectancy factor based on age. If a spouse is the sole beneficiary and more than 10 years younger, the Joint Life Expectancy Table applies.

#4: Calculate the RMD

Divide the account balance by the life expectancy factor to determine the RMD. For example, with a $100,000 balance and a factor of 27.4, the RMD would be $3,649.64. The full RMD must be taken by December 31.

#5: Understand Aggregation Rules

RMDs from multiple IRAs can be combined and taken from any one of the accounts. However, RMDs from 401(k)s and other employer plans cannot be aggregated with IRAs and must be calculated separately for each account.

Final Thoughts

Understanding RMDs is crucial for managing retirement funds and avoiding costly penalties. If you have any questions about calculating your RMDs or need assistance with the process, don't hesitate to reach out. It's always a good idea to consult with a professional if you have multiple accounts or a complex situation. We're here to help make sure everything is calculated correctly and fits into your broader retirement strategy.

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