Once you reach the age of 73, you’re legally required to take your Required Minimum Distributions (RMDs), ensuring the government can collect taxes on your money.
If you’re already above 73, or are nearing that age, it’s very important to know how to calculate your required minimum distribution – which you should also review with a financial advisor
Key Points – Required Minimum Distributions begin at age 73 (increasing to 75 by 2033) and are calculated by dividing your total retirement account balance by your IRS life expectancy factor, with penalties of up to 25% for missed deadlines (reducible to 10% if corrected within two years). – Roth IRAs don’t require distributions while the original owner is alive, surviving spouses can delay distributions until their deceased spouse’s 73rd year using the Uniform Lifetime Table, and individuals age 70½ or older can use Qualified Charitable Distributions up to $111,000 annually to satisfy RMDs while excluding the amount from taxable income. The analyst who called NVIDIA in 2010 just named his top 10 stocks. Get them here FREE. – The analyst who called NVIDIA in 2010 just named his top 10 AI stocks.
Get them here FREE. To calculate your RMD, the IRS will use a formula that includes your total account balances, your age, your life expectancy, and your beneficiary life expectancies. The IRS then divides the total balance by your life expectancy factor.