Q: How do I calculate my Required Minimum Distribution?

A:  The company that holds your IRA usually calculates it for you, although it is your responsibility.  The math is pretty simple:

Step 1 – Find out your IRA account balance as of the previous December 31.

Step 2 – Divide by the number from the Uniform Life Expectancy Table that corresponds with the age you will attain on your birthday in the current year. Note, RMDs begin in the year your turn 72.

Uniform Life Table

Let’s look at an example: Suppose your account balance last 12/31 was $250,000 and you are going to be 72 on your birthday this year. You can see from the table above that the divisor that corresponds with your age is 25.6.

Therefore, $250,000 ÷ 25.6 = $9,766.  You must withdraw this amount by 12/31 of this year.

One caveat to the above. You can use the Joint Life Expectancy table, which results in a smaller RMD, if your spouse is more than 10 years younger than you. There is also a different table, the Single Life Expectancy table for beneficiaries of an account (an inherited IRA).

Now that you understand the math, here is an RMD Calculator to make things simple on yourself.