The basic formula for your required minimum distribution

Your required minimum distribution (RMD) is the smallest amount you must withdraw from a traditional IRA each year after you turn 73. The IRS calculates it by dividing your IRA balance on December 31 of the previous year by a life expectancy factor published in IRS tables.

The formula is straightforward: take your December 31 balance, then divide it by the divisor that matches your age in the IRS Uniform Lifetime Table. The result is your RMD for that year. You must withdraw this amount by December 31 or face a penalty of 25 percent of the shortfall (reduced to 10 percent if you correct it within two years).

The IRS updates the life expectancy divisors periodically. The most recent update took effect in 2022 and lowered the divisors, which means your RMD will be higher than it would have been under the old tables. This change affects everyone born in 1951 or later.

Key Takeaways

  • Your RMD equals your December 31 IRA balance divided by the divisor for your age in the IRS Uniform Lifetime Table.
  • You must begin taking RMDs the year you turn 73, with the first distribution due by April 1 of the following year.
  • If you have multiple IRAs, you calculate the RMD for each account separately but can withdraw the total from one account.
  • The IRS publishes updated life expectancy tables; using an outdated table will result in an incorrect calculation.
  • Roth IRAs have no RMD during the account owner's lifetime, but beneficiaries must take distributions after inheriting one.

Finding your December 31 balance and the correct IRS table

Your IRA custodian (the bank, brokerage, or investment company holding your account) sends you a statement showing the balance on December 31 of the previous year. Use that exact figure, not your current balance. If you have multiple IRAs at different institutions, you need the December 31 balance for each one.

The IRS Uniform Lifetime Table is the one most people use. It appears in IRS Publication 590-B, which you can read free from irs.gov. The table has two columns: your age and the corresponding divisor. Find your age on the left, then read across to get the divisor you need for that year's calculation.

If you are married and your spouse is more than 10 years younger than you, you use the IRS Joint Life and Last Survivor Expectancy Table instead. This table produces a lower RMD because it assumes a longer life span. Your IRA custodian can tell you which table applies to your situation.

Step-by-step calculation with an example

Suppose you turned 75 on June 15 of this year. On December 31 of last year, your traditional IRA balance was $240,000. You look up age 75 in the Uniform Lifetime Table and find the divisor is 24.6.

Your calculation: $240,000 ÷ 24.6 = $9,756.10. That is your RMD for the year. You must withdraw at least $9,756.10 by December 31. You can withdraw more if you wish, but anything above the RMD does not count toward next year's requirement.

If you have a second IRA with a December 31 balance of $85,000, you calculate its RMD separately: $85,000 ÷ 24.6 = $3,455.28. Your total RMD for the year is $9,756.10 + $3,455.28 = $13,211.38. You can take this entire amount from one IRA or split it between them.

What happens if you have multiple IRAs or inherited accounts

Each traditional IRA you own requires its own RMD calculation. You cannot combine the balances and divide by one divisor. However, once you have calculated the RMD for each account, you can withdraw the total from whichever account you choose — or split the withdrawal across all of them.

If you inherited a traditional IRA from someone other than your spouse, the rules are different. You must use the Single Life Expectancy Table and your own age, not the original owner's age. The IRS provides this table in Publication 590-B as well. Inherited IRAs have different distribution rules depending on when the original owner died and your relationship to them.

Roth IRAs are exempt from RMD rules while you are alive. You never have to withdraw from a Roth IRA during your lifetime. However, if you inherit a Roth IRA, you must take distributions as a beneficiary, and the calculation depends on your relationship to the original owner and when they died.

When your first RMD is due and how to handle the first-year important date

The year you turn 73, your first RMD is not due until April 1 of the following year. For example, if you turn 73 in 2024, your first RMD is due by April 1, 2025. After that, all RMDs are due by December 31 of each year.

Many people delay their first RMD until April 1, but this creates a problem: you then owe two RMDs in the same calendar year (one by April 1 and one by December 31), which can push you into a higher tax bracket. Taking your first RMD by December 31 of the year you turn 73 avoids this bunching effect.

Your IRA custodian can calculate your RMD for you and may offer to withdraw it automatically. Ask whether they do this and whether you can set up recurring withdrawals. Some custodians charge a small fee for RMD calculations, while others provide it at no cost.

Common mistakes in RMD calculations

Using your current-year balance instead of your December 31 prior-year balance is the most frequent error. The IRS is strict about this: you must use the December 31 balance from the previous calendar year, even if your account has grown or shrunk since then.

Using an outdated life expectancy table is another common mistake. The divisors changed in 2022, and using the old table will underestimate your RMD. Check the publication date on any table you read to confirm it reflects the current rules.

Forgetting to calculate RMDs for all your IRAs is also common. If you have a traditional IRA at one bank and another at a brokerage, you must calculate both separately. Missing even one account can result in a penalty on the shortfall.

What to do if you miss a important date or calculate incorrectly

If you withdraw less than your RMD by December 31, the IRS charges a penalty of 25 percent of the amount you failed to withdraw (or 10 percent if you correct it within two years). For example, if your RMD was $10,000 and you withdrew only $7,000, the penalty is $750 (25 percent of $3,000).

You can request a waiver of the penalty if you have a reasonable cause — for instance, if your custodian made an error in calculating your RMD or if you were seriously ill. File Form 5329 with your tax return and attach a written explanation. The IRS does not always grant waivers, but it is worth requesting if circumstances were beyond your control.

If you discover an error after the important date, correct it as soon as possible. Withdraw the shortfall when ready and report it on your tax return. The sooner you correct the mistake, the better your case for a penalty waiver.

Frequently Asked Questions

Can I take my RMD all at once or do I have to spread it throughout the year?

You can take your entire RMD in one withdrawal or spread it across multiple withdrawals during the year. The only requirement is that the total amount withdrawn by December 31 meets or exceeds your calculated RMD. Some people take monthly withdrawals for cash flow reasons; others take one lump sum.

What if my IRA custodian calculates my RMD differently than I do?

Ask your custodian to explain their calculation and show you which table and balance they used. If you believe they made an error, request a corrected calculation in writing. You are responsible for the accuracy of your RMD, so verify it yourself using Publication 590-B and the December 31 balance statement.

Do I have to pay income tax on my RMD?

Yes. RMDs from traditional IRAs are taxed as ordinary income in the year you withdraw them. The amount is added to your other income and taxed at your marginal rate. Your custodian will report the distribution on Form 1099-R, which you report on your tax return.

What happens to my RMD if the stock market drops and my IRA balance falls?

Your RMD is based on the December 31 balance of the previous year, not the current year. If your balance drops after December 31, your RMD does not change. However, next year's RMD will be calculated using the new, lower December 31 balance, so it will be smaller.

Can I roll over my RMD into another IRA to avoid taking it out?

No. Once you have reached age 73, you cannot roll over your RMD. You must withdraw it and pay tax on it. However, you can roll over any amount above your RMD into another IRA if you wish.