Phase 2 · Wealth & Leverage
Required Minimum Distribution Calculator
Tax-deferred for decades — then the IRS wants its cut. Project the withdrawals you'll be forced to take from 73 on, and the lifetime tax bomb hiding inside your Traditional balance.
How are required minimum distributions calculated?
Divide last year's ending balance by your IRS Uniform Lifetime Table factor for your age: RMD = prior year-end balance ÷ factor. RMDs begin at 73. The factor falls every year, so the required percentage climbs — 3.77% at 73, 4.95% at 80, 9.26% at 92 — and the whole distribution is taxed as ordinary income.
- Worked example (defaults on this page): a $1,000,000 Traditional balance at 73 forces a $37,736 first withdrawal (factor 26.5).
- Projected to age 92 at a 6% return, total RMDs reach $1,267,151 and generate $304,116 of tax at a 24% rate — while the balance still ends near $950,353.
- Growth outpacing the early factors is why the account barely shrinks: at 73 you must take 3.77% while earning 6%, so the tax bill grows for years before the balance does.
- Roth IRAs have no RMDs during the owner’s lifetime, which is why Roth conversions in low-income years between retirement and 73 are the standard way to defuse this.
Account balance through retirement
Under the hood
The math, fully exposed
Each year from 73 on, the IRS divides your balance by a life-expectancy factor:
RMD = prior year-end balance ÷ IRS Uniform Lifetime factor
Factor at 73 = 26.5 (≈3.77%), at 80 = 20.2 (≈4.95%), falling every year
Tax = RMD × marginal rate
Next balance = (balance − RMD) × (1 + return)
- The percentage only climbs: as the factor shrinks each year, RMDs take a bigger slice — often outpacing what you'd choose to withdraw, pushing you into higher brackets.
- Growth fights you here: a higher return grows the balance the RMD is calculated on, enlarging future withdrawals and their tax — the opposite of every other tool.
- It's a timing problem: income you deferred for decades lands in a narrow window. Moving some out early — Roth conversions, QCDs — is how you flatten the bomb.
The reference table
IRS Uniform Lifetime Table (ages 72–120)
This is the divisor the IRS actually uses — Pub. 590-B, Appendix B, Table III, which applies to most account owners. Divide your prior year-end balance by the factor for the age you reach this year. The third column is the same thing as a percentage (100 ÷ factor), which is usually the number people are really looking for.
| Age | Factor | Required % |
|---|---|---|
| 72 | 27.4 | 3.65% |
| 73 ← | 26.5 | 3.77% |
| 74 | 25.5 | 3.92% |
| 75 | 24.6 | 4.07% |
| 76 | 23.7 | 4.22% |
| 77 | 22.9 | 4.37% |
| 78 | 22.0 | 4.55% |
| 79 | 21.1 | 4.74% |
| 80 | 20.2 | 4.95% |
| 81 | 19.4 | 5.15% |
| 82 | 18.5 | 5.41% |
| 83 | 17.7 | 5.65% |
| 84 | 16.8 | 5.95% |
| 85 | 16.0 | 6.25% |
| 86 | 15.2 | 6.58% |
| 87 | 14.4 | 6.94% |
| 88 | 13.7 | 7.30% |
| 89 | 12.9 | 7.75% |
| 90 | 12.2 | 8.20% |
| 91 | 11.5 | 8.70% |
| 92 | 10.8 | 9.26% |
| 93 | 10.1 | 9.90% |
| 94 | 9.5 | 10.53% |
| 95 | 8.9 | 11.24% |
| 96 | 8.4 | 11.90% |
| Age | Factor | Required % |
|---|---|---|
| 97 | 7.8 | 12.82% |
| 98 | 7.3 | 13.70% |
| 99 | 6.8 | 14.71% |
| 100 | 6.4 | 15.63% |
| 101 | 6.0 | 16.67% |
| 102 | 5.6 | 17.86% |
| 103 | 5.2 | 19.23% |
| 104 | 4.9 | 20.41% |
| 105 | 4.6 | 21.74% |
| 106 | 4.3 | 23.26% |
| 107 | 4.1 | 24.39% |
| 108 | 3.9 | 25.64% |
| 109 | 3.7 | 27.03% |
| 110 | 3.5 | 28.57% |
| 111 | 3.4 | 29.41% |
| 112 | 3.3 | 30.30% |
| 113 | 3.1 | 32.26% |
| 114 | 3.0 | 33.33% |
| 115 | 2.9 | 34.48% |
| 116 | 2.8 | 35.71% |
| 117 | 2.7 | 37.04% |
| 118 | 2.5 | 40.00% |
| 119 | 2.3 | 43.48% |
| 120 | 2.0 | 50.00% |
- RMDs begin at 73 under the SECURE 2.0 Act (marked ←). The table starts at 72 because that was the prior start age and pre-2023 rules still reference it.
- Table III is not the only table. If your sole beneficiary is a spouse more than 10 years younger, you use the Joint Life and Last Survivor table (Table II) instead, which gives a larger factor and a smaller RMD. Inherited accounts use the Single Life table (Table I).
- Use the age you turn during the year, not your age on 1 January, and the balance as of 31 December of the previous year.
- Your first RMD may be deferred to 1 April of the following year — but doing so stacks two distributions into one tax year, which is usually the wrong trade.
Your directives
What to do next, based on your numbers
Adjust the sliders to generate tailored recommendations.
Answers
Frequently asked questions
What is a Required Minimum Distribution?
An RMD is the minimum amount the IRS forces you to withdraw each year from tax-deferred accounts — Traditional IRAs and 401(k)s — starting at age 73 (rising to 75 in 2033). The withdrawal is taxed as ordinary income whether you need the money or not. Decades of tax-deferred growth come due all at once, which is why large pre-tax balances create a "tax bomb" in your 70s and 80s.
How is the RMD calculated?
Each year's RMD is your prior year-end balance divided by a life-expectancy factor from the IRS Uniform Lifetime Table. At 73 the factor is 26.5, so the first RMD is about 3.77% of the balance; by 80 it is 20.2 (≈4.95%), and the percentage climbs every year. A bigger balance and a longer life both mean larger total withdrawals — and a larger tax bill.
What happens if I skip or underpay an RMD?
The penalty is steep: 25% of the amount you failed to withdraw (reduced to 10% if you correct it promptly), on top of the income tax you still owe. RMDs are not optional. If you have multiple accounts the rules on which can be aggregated differ between IRAs and 401(k)s, so confirm the details — this is an educational model, not tax advice.
How can I shrink the RMD tax bomb?
Three common levers: convert some Traditional money to Roth in your 60s (Roth has no RMDs) while you are in a lower bracket; use Qualified Charitable Distributions to send RMDs straight to charity tax-free after 70½; and draw down tax-deferred accounts earlier to flatten the balance before 73. Each shifts income out of the high-RMD years. Confirm specifics with a tax professional.