| Required Minimum IRA Distribution
Calculator - 401k Calculators
(August 1, 2011)
 The
IRS requires that you must withdraw the required minimum distributions
from your IRA or 401(k) account from the age you turn 70 and 1/2
years old. The reason for this, well the IRS wants to generate tax
revenue, thus when you withdraw funds from your IRA that was growing
tax-deferred, you will have to pay taxes upon the minimum required
distribution. Determining exactly how much is required to be distributed
as minimum is very important to know, as the penalties for doing
it wrong are severe. You can use the calculator linked below to
calculate exactly how much required minimum distributions you might
have to take out.
Go
here to access this calculator:
To test this calculator, here's a hypothetical
calculation I did:
| Account
balance as of 12/31 of year prior to distribution year |
$1,500,000 |
| Your age as of 12/31
of distribution year |
75 |
| Beneficiary age |
60 |
| Estimated rate of
return |
5% |
| Is your birthday
after June 30th? |
No |
| Is your sole beneficiary
a spouse? |
Yes |
Answer:
Your minimum required IRA distribution is $56,603.77 |
Your minimum distribution was based on a 26.5
year life expectancy. Minimum distributions are calculated by taking
your account balance on December 31st of the preceding year and
dividing it by your life expectancy. Of course, you have no required
minimum distribution until you have reached an age of 70 1/2.
Your
Age / Beneficiary's Age |
Joint
Life Expectancy |
Required
Minimum Distribution |
Remaining
Balance |
| 75/60 |
26.5 |
$56,603.77 |
$1,518,396.23 |
| 76/61 |
25.6 |
$59,312.35 |
$1,535,003.69 |
| 77/62 |
24.7 |
$62,145.90 |
$1,549,607.98 |
| 78/63 |
23.8 |
$65,109.58 |
$1,561,978.79 |
| 79/64 |
22.9 |
$68,208.68 |
$1,571,869.05 |
| 80/65 |
22.1 |
$71,125.30 |
$1,579,337.21 |
| 81/66 |
21.2 |
$74,497.04 |
$1,583,807.03 |
| 82/67 |
20.4 |
$77,637.60 |
$1,585,359.78 |
| 83/68 |
19.5 |
$81,300.50 |
$1,583,327.27 |
| 84/69 |
18.7 |
$84,669.90 |
$1,577,823.73 |
| 85/70 |
17.9 |
$88,146.58 |
$1,568,568.34 |
| 86/71 |
17.1 |
$91,729.14 |
$1,555,267.61 |
| 87/72 |
16.4 |
$94,833.39 |
$1,538,197.61 |
| 88/73 |
15.6 |
$98,602.41 |
$1,516,505.08 |
| 89/74 |
14.9 |
$101,778.87 |
$1,490,551.46 |
| 90/75 |
14.2 |
$104,968.41 |
$1,460,110.62 |
| 91/76 |
13.5 |
$108,156.34 |
$1,424,959.81 |
| 92/77 |
12.8 |
$111,324.98 |
$1,384,882.82 |
| 93/78 |
12.1 |
$114,453.12 |
$1,339,673.85 |
| 94/79 |
11.5 |
$116,493.38 |
$1,290,164.16 |
* Notice the joint life expectancy
after the age of 70 and 1/2 years is about 26.5 years,
which adds up to (70.5 + 26.5 = 97 years).
** Also notice that the required minimum
distribution increases each year after the age of 70 and
1/2 years by almost $3000 a year going up to $4,000 in
later stages of the joint life expectancy.
*** It is interesting to note that
at the age of 94, the investor in this case will have
a remaining balance of $1,290,164.16 (a good chunk of
cash) after having withdrawn quite a fair chunk of minimum
distributions. It is important to point out that this
is made possible with years and years of compounding interest,
that really builds up power.
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