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Using an RMD Table

Required minimum distributions—or RMDs—are an amount the IRS requires you to withdraw from your retirement account each year after age 72. The RMD table can help you determine how much you need to withdraw and when.

Written by Erin Gobler / July 5, 2022

Quick Bites

  • A required minimum distribution, or RMD, is an amount the IRS requires taxpayers to withdraw from their pre-tax retirement accounts once they reach 72.
  • RMDs are a way for the IRS to collect tax revenue from money that’s been sitting for decades in tax-advantaged retirement accounts.
  • The RMD table—officially known as the IRS Uniform Lifetime Table—gives you the information you’ll need to calculate your RMDs.
  • If you fail to take your RMDs, you’ll be subject to excise taxes as a percentage of your required RMD.

Retirement accounts like your 401(k) plan or individual retirement account (IRA) come with plenty of perks, including the ability to deduct your contributions and enjoy tax-free investment growth. But those benefits don’t last forever, and eventually, the Internal Revenue Service (IRS) will require you to start taking distributions so it can collect taxes.

Are you wondering how much you’ll need to withdraw from your 401(k) or IRA during retirement? In this article, we’ll explain how required minimum distributions work, why the IRS requires them and how to use the RMD table to calculate your required distributions.

Inside this article

  1. What are RMDs?
  2. Why RMDs exist
  3. What is an RMD table?
  4. How to calculate your RMD
  5. Penalty for failing to take RMDs

What are required minimum distributions, or RMDs?

Before we dive into RMD tables, we should first back up a few steps and explain how required minimum distributions (RMDs) work. The IRS requires that everyone take distributions from their pre-tax retirement accounts once they reach age 72.

RMDs are the minimum that you must withdraw from your retirement account each year. You can withdraw more than that amount should you so desire.

RMDs are required for all pre-tax retirement accounts, including:

  • 401(k)s

  • 403(b)s

  • 457(b)s

  • Traditional IRAs

  • SEP IRAs

  • SIMPLE IRAs

  • Profit-sharing plans

  • Other defined contribution plans[1]

Because the money you contributed to these accounts was tax-free, your RMDs will be a part of your taxable income for the year and you’ll pay ordinary income taxes on them.

“You can choose to take your RMD monthly, quarterly, in one lump sum for the year or reinvest it in a non-retirement account after paying taxes on it,” says David Neterer, president of Sterling Financial Management.

Alert

RMDs are only required for pre-tax retirement accounts. As a result, you don’t have to take RMDs from your Roth IRA.

Why RMDs exist

RMDs are a way for the IRS to collect tax revenue from retirement accounts. Remember, when you contribute to your 401(k) or another pre-tax retirement account, you aren’t taxed on those dollars. And as long as the money remains in the account, your investment grows tax-free.

Once you contribute money to a retirement account, it usually sits for decades without the IRS being able to collect taxes on it. And without RMDs, some taxpayers would certainly leave the money in the account indefinitely, living off other income and passing the dollars in their retirement accounts onto their heirs when they pass away.

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But the IRS won’t allow you to take advantage of this tax benefit forever. Instead, RMDs are a way for them to ensure they’ll be able to collect taxes on those dollars.

What is an RMD table and why is it important?

The IRS Uniform Lifetime Table—also known as the RMD table—is a life expectancy chart designed to help you calculate your RMDs based on your estimated remaining years and the amount of money in your retirement accounts.[2]

For unmarried owners, married owners whose spouses aren't more than 10 years younger and married owners whose spouses aren't the sole beneficiaries of their IRAs:

AgeDistribution periodAgeDistribution period
7227.4977.8
7326.5987.3
7425.5996.8
7524.61006.4
7623.71016.0
7722.91025.6
7822.01035.2
7921.11044.9
8020.21054.6
8119.41064.3
8218.51074.1
8317.71083.9
8416.81093.7
8516.01103.5
8615.21113.4
8714.41123.3
8813.71133.1
8912.91143.0
9012.21152.9
9111.51162.8
9210.81172.7
9310.11182.5
949.51192.3
958.91202.0
968.4

How to calculate your RMD

You can calculate your RMDs each year using the RMD table provided by the IRS. First, you’ll have to determine the year-end value of your retirement account. You always use the value at the end of the previous year, so when calculating your RMDs for the year you turn 72, you would use the account value at the end of the year you turned 71.

Once you know your account value, you can find your age on the IRS Uniform Lifetime Table. Divide your account value by the distribution period that corresponds with your current age. The result is the amount you must withdraw from your retirement account for the year.[3]

“If you have more than one retirement account, you can take separate RMDs from each account, take the total combined RMD from one account or withdraw different amounts from both accounts,” Neterer says. “The combined amount must add up to your total RMD amount.”

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As you can see, the distribution period gets smaller each year, meaning as you get older, you’ll be required to withdraw a larger percentage of your remaining retirement savings. For example, someone who is 72 years old with $100,000 in their retirement account would have to take an RMD of $3,649.64 for the year. But someone who is 90 with a balance of $100,000 would have to withdraw $8,196.72.

“A financial advisor will instruct you on how much your RMD is based on the total amount in your account(s) and make sure you take the correct amount every year,” Neterer says. “If you do not have a financial advisor, it is your responsibility to reach out to the entity holding your retirement account to find out what your RMD is for that year.”

Tip

If you don’t want to hire a financial advisor and aren’t uncomfortable calculating your RMD yourself, the Securities and Exchange Commission and many brokerage firms offer RMD calculators to help you figure out how much you must withdraw this year.[4]

Penalty for failing to take RMDs

It may not seem like that big of a deal to skip your RMDs for the year or postpone them until you’re ready to start withdrawing funds. Unfortunately, you could face steep financial penalties.

For each year you fail to withdraw your RMDs, the IRS will impose a 50% excise tax on the amount you failed to distribute. For example, if you had an RMD of $5,000 and took no distribution, you would pay an excise tax amount of $2,500. If you had withdrawn a portion of your RMD, the excise tax would apply only to the percentage of your RMD that you failed to withdraw.[1]

If you fail to take your RMD and have an excise tax to report, you’ll have to complete IRS Form 5329 and file it with your annual income tax return.[5]

Article Sources
  1. “Retirement Topics — Required Minimum Distributions (RMDs). IRS. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds.
  2. “Publication 590-B (2021), Distributions from Individual Retirement Arrangements (IRAs). IRS. https://www.irs.gov/publications/p590b#en_US_2021_publink100089977.
  3. “IRS Uniform Lifetime Table.” Fidelity. https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/UniformLifetimeTable.pdf.
  4. “Required Minimum Distribution Calculator.” Investor.gov. https://www.investor.gov/financial-tools-calculators/calculators/required-minimum-distribution-calculator.
  5. “Form 5329: Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.” IRS. https://www.irs.gov/pub/irs-pdf/f5329.pdf.

About the Author

Erin Gobler

Erin Gobler

Erin is a personal finance expert and journalist who has been writing online for nearly a decade. Erin’s work has appeared in major financial publications, including Fox Business, Time, Credit Karma, and more.

Full bio

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