How to Calculate Minimum Required Distributions?

Understanding how to calculate Required Minimum Distributions (RMDs) for your retirement accounts is crucial for effective financial planning and compliance with tax laws. In 2024, certain rules regarding RMDs continue to apply, along with specific considerations for inherited IRAs, especially those inherited by spouses and children. This guide will walk you through the process of calculating your RMDs and highlight special rules that may affect your calculations.

Step-by-Step Guide to Calculating RMDs in 2024

  1. Determine Your Account Balance:
    • Calculate your RMD based on the account balance of your retirement accounts (e.g., IRA, 401(k), 403(b), etc.) as of December 31 of the previous year. For 2024, use the balance as of December 31, 2023.
  2. Find Your Distribution Period:
    • Use the IRS Uniform Lifetime Table to find your distribution period. This table is applicable to most retirees and provides the factor by which you divide your account balance. The IRS updates these tables occasionally, so ensure you are using the latest version for 2024.
    • If you are married and your spouse is more than 10 years younger than you and is the sole beneficiary of your retirement account, use the IRS Joint Life and Last Survivor Expectancy Table instead. This table generally results in a lower RMD.
  3. Calculate the RMD:
    • Divide the account balance by the distribution period from the IRS table. For example, if your year-end balance is $100,000 and your distribution period is 25 years, your RMD would be $100,000 / 25 = $4,000.

Special Rules for Inherited IRAs

The rules for calculating RMDs from inherited IRAs can vary significantly depending on the relationship to the decedent and the year the IRA was inherited.

Inherited IRAs by Spouses:

  • Treat as Own: Spouses inheriting IRAs have the option to treat the IRA as their own. This allows them to delay RMDs until they reach their own required beginning date, which is April 1 following the year they turn 73, or to follow the normal RMD rules that would apply based on their age.
  • Continue as Beneficiary: Alternatively, spouses may choose to remain as beneficiaries rather than assuming ownership. This choice allows them to delay RMDs until the deceased would have reached their required beginning age, currently 73.

Inherited IRAs by Children and Other Non-spouses:

  • Non-spouse beneficiaries, including children, are generally subject to the 10-year rule under the SECURE Act. This rule requires the entire account to be emptied by the end of the 10th year following the year of inheritance, with no annual RMDs necessary. However, if the IRA was inherited before the SECURE Act in 2020, the beneficiaries could take RMDs based on their own life expectancies.

Consulting with a Professional

Given the complexity of RMD calculations and the severe penalties for failing to meet the requirements (a 50% tax penalty on the amount not distributed as required), it is highly recommended to consult with a Fee-Only financial adviser. They can provide guidance tailored to your specific situation, including strategies for minimizing tax implications and ensuring compliance with the latest IRS regulations.


Calculating RMDs correctly is essential for managing your retirement savings efficiently and avoiding hefty penalties. By understanding the rules specific to your type of retirement account and any inherited IRAs, you can ensure that you meet the necessary legal requirements while optimizing your retirement income strategy.

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