Retirement Blog

How to Calculate RMDs

May 12, 2022

calculate RMDs

Ever wondered how to calculate your RMD correctly?

Here are some of the basics you should know about:

  • To calculate your RMD, divide your year-end account balance from the previous year by the IRS life-expectancy factor based on your birthday in the current year.1
  • If you own multiple IRAs, you need to calculate the RMD for each account, but you can take the total RMD from just one IRA or any combination of IRAs.1
  • A retiree who owns 401(k)s at age 72 is subject to RMDs on those accounts, too. But unlike IRAs, if you own multiple 401(k)s, you must calculate and take each 401(k)’s RMD separately.1
  • You can take your annual RMD in a lump sum or piecemeal, perhaps in monthly or quarterly payments.1
    • Delaying the RMD until year-end, however, gives your money more time to grow tax-deferred.1

Our goal is to help you keep more of your retirement income and avoid unnecessary taxation. We can walk you through the process to determine the ideal withdrawal strategy for you. Contact us today with any questions you may have or to schedule a complimentary consultation.