A Required Minimum Distribution (RMD) is generally calculated by dividing the balance of your IRA or retirement account as of December 31 of the previous year by a life expectancy factor provided by the IRS.
The IRS publishes these life expectancy factors in Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs). The table you use depends on your specific situation.
Which Life Expectancy Table Should I Use?
Joint and Last Survivor Table
Use the Joint and Last Survivor Table if:
- Your spouse is the sole beneficiary of your IRA or retirement account, and
- Your spouse is more than 10 years younger than you.
This table generally results in a lower RMD because it reflects the longer combined life expectancy of you and your spouse.
Uniform Lifetime Table
Use the Uniform Lifetime Table if:
- Your spouse is not your sole beneficiary, or
- Your spouse is not more than 10 years younger than you.
Most IRA owners use this table to calculate their annual RMD.
Single Life Expectancy Table
Use the Single Life Expectancy Table if:
- You inherited an IRA and are a beneficiary who is not the owner's surviving spouse, or
- The beneficiary is not an individual and the account owner died on or after their required beginning date.
Inherited retirement accounts are subject to special distribution rules, so be sure to review the IRS guidance that applies to your situation.
How Do I Calculate the Amount?
Once you've determined the correct table:
- Find the account balance as of December 31 of the prior year.
- Locate the applicable life expectancy factor from the IRS table.
- Divide the account balance by the life expectancy factor.
Example:
- Prior year-end IRA balance: $100,000
- Life expectancy factor: 26.5
- RMD: $100,000 ÷ 26.5 = $3,773.58
Your financial institution may calculate the RMD for you, but you remain responsible for ensuring the correct amount is withdrawn each year.
What If I Have More Than One IRA or Retirement Account?
RMD rules vary depending on the type of account you own.
Traditional IRAs
You must calculate the RMD separately for each IRA you own. However, after calculating each amount, you can withdraw the combined total from:
- One IRA, or
- Multiple IRAs
403(b) Accounts
Like IRAs, you must calculate the RMD separately for each 403(b) account. You may then satisfy the total RMD by taking distributions from one or more of your 403(b) accounts.
401(k), 457(b), and Other Employer Plans
For most employer-sponsored retirement plans, including:
- 401(k) plans
- 457(b) plans
- Other qualified retirement plans
You generally must take the RMD separately from each account. These distributions cannot usually be combined with RMDs from other plan types.
What Happens If I Don't Take My Full RMD?
If you fail to withdraw your entire required minimum distribution, you may owe an IRS penalty on the amount that was not distributed.
In many cases, taxpayers who missed an RMD due to reasonable error may request penalty relief by filing Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts and providing an explanation.
Important
If you did not take your full RMD for the year, you may need to complete Part IX of Form 5329 when filing your tax return.
Review your retirement account statements carefully and work with your financial institution if you're unsure whether you've satisfied your RMD requirements.
Additional Tip
Many IRA custodians and retirement plan administrators provide RMD calculations as a service. While these calculations can be helpful, the account owner is ultimately responsible for taking the correct distribution amount by the applicable deadline.