Quick Answer
Calculate your RMD by dividing your December 31 account balance by your life expectancy factor from IRS tables. For example, a $500,000 IRA balance at age 75 requires a $21,740 RMD (500,000 ÷ 23.0 life expectancy factor). The penalty for underpayment is 25% of the shortfall.
Best Answer
Robert Kim, CPA
Best for new retirees age 73+ who need to understand basic RMD calculations
Basic RMD calculation formula
Your Required Minimum Distribution equals your account balance divided by your life expectancy factor:
RMD = Account Balance (Dec 31) ÷ Life Expectancy Factor
Step-by-step RMD calculation
Step 1: Get your account balance as of December 31 of the prior year
Step 2: Find your life expectancy factor using IRS tables
Step 3: Divide balance by factor
Step 4: Take the distribution by December 31 (or April 1 for your first RMD)
Example: First RMD at age 73
John turns 73 in 2026 and has a traditional IRA worth $600,000 on December 31, 2025.
Life expectancy factors by age
Which accounts require RMDs
Accounts with RMDs starting at 73:
Accounts without lifetime RMDs:
Multiple account RMD rules
IRAs: Calculate each IRA's RMD separately, but can take the total from any combination of your IRAs
401(k)s: Must take RMD from each 401(k) separately — cannot aggregate
Example: Multiple IRA calculation
Special situations and different tables
Uniform Lifetime Table (most common):
Joint Life Table (lower RMDs):
Single Life Table:
RMD timing and penalties
First RMD: Can be delayed until April 1 of the year after you turn 73
Subsequent RMDs: Must be taken by December 31 each year
Penalty for shortfall: 25% of the amount you should have taken (reduced to 10% if corrected quickly)
What you should do
1. Get December 31 balance statements from all retirement account custodians
2. Use IRS Publication 590-B tables or custodian calculators
3. Calculate by account type (aggregate IRAs, separate 401(k)s)
4. Take distributions before December 31 (or April 1 for first RMD)
5. Keep detailed records of calculations and distributions
[Use our refund estimator](refund-estimator) to see how RMDs affect your overall tax situation.
Key takeaway: RMD calculation is simple math (balance ÷ life expectancy factor), but the 25% penalty for mistakes makes accuracy crucial. Most custodians will calculate for you.
*Sources: [IRS Publication 590-B](https://www.irs.gov/pub/irs-pdf/p590b.pdf), [IRS Uniform Lifetime Table]*
Key Takeaway: Divide your December 31 account balance by your age-based life expectancy factor. Mistakes cost 25% penalties, so use custodian calculators or professional help.
Life expectancy factors and RMD percentages by age
| Age | Life Expectancy Factor | RMD as % of Balance | $1M Balance RMD |
|---|---|---|---|
| 73 | 26.5 | 3.77% | $37,736 |
| 75 | 24.6 | 4.07% | $40,650 |
| 80 | 20.2 | 4.95% | $49,505 |
| 85 | 16.0 | 6.25% | $62,500 |
| 90 | 12.2 | 8.20% | $81,967 |
| 95 | 9.1 | 10.99% | $109,890 |
More Perspectives
Michelle Woodard, JD
Best for wealthy retirees with substantial retirement assets who need advanced RMD planning
Advanced RMD considerations for large accounts
With retirement balances over $1 million, RMDs become a significant tax planning challenge requiring strategic thinking beyond basic calculations.
Impact of large RMDs on tax brackets
A $3 million IRA at age 75 generates an RMD of ~$122,000 ($3M ÷ 24.6). Combined with Social Security and other income, this often pushes retirees into higher brackets:
Multi-year RMD projection strategy
Project RMDs 5-10 years ahead to plan:
Example: $2M portfolio RMD progression
Strategic distribution timing
December distributions: Take RMDs in December to:
January distributions: Consider early distributions to:
Key takeaway: Large RMDs require multi-year tax planning to minimize bracket creep, Medicare surcharges, and state tax impacts while preserving wealth transfer goals.
Key Takeaway: Large retirement balances require strategic RMD planning to minimize tax bracket impacts and coordinate with Roth conversions and charitable giving strategies.
Robert Kim, CPA
Best for beneficiaries who inherited retirement accounts and must navigate complex inherited RMD rules
Inherited account RMD calculations
Inherited retirement accounts have different RMD rules depending on your relationship to the deceased owner and when they died.
10-year rule (most common for non-spouses)
For most non-spouse beneficiaries inheriting after 2019:
Spouse beneficiary options
Surviving spouses can:
1. Treat as own IRA: Use Uniform Lifetime Table, start RMDs at age 73
2. Remain as beneficiary: Use Single Life Table, start immediately or when deceased would have turned 73
Example: Non-spouse inherited IRA calculation
Sarah (age 45) inherits her father's $400,000 IRA in 2026. Her father was 78 and taking RMDs.
Annual RMD calculation:
10-year requirement: Account must be empty by December 31, 2036
Trust beneficiary complications
If a trust inherits retirement accounts:
Key takeaway: Inherited RMD rules are complex and depend on beneficiary type, death date, and whether the owner had started RMDs — professional guidance prevents costly mistakes.
Key Takeaway: Inherited RMD calculations depend on your relationship to the deceased and when they died. Most non-spouses face the 10-year rule with potential annual RMDs.
Sources
- IRS Publication 590-B — Distributions from Individual Retirement Arrangements
- IRS Uniform Lifetime Table — Life expectancy factors for RMD calculations
Related Questions
Reviewed by Robert Kim, CPA on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.