- Calculation notes
- **2024_RMD_CALCULATION_NOTE**
- Life expectancy calculations
- Life expectancy is determined using the Single Life Expectancy table and the spouse beneficiary's age on December 31st. The first year for an RMD is the year following the owner's death unless the original account owner died before RMDs were required. In this case the first RMD for the spouse beneficiary is the year that the original account owner would have attained the age for RMDs to begin. In all future years, once RMDs have begun, the remaining life expectancy is 'recalculated' each year based on the spouse beneficiary's age as of December 31st of that calendar year.
Another option a spouse beneficiary can elect is to take an inherited account and treat it as his or her own. In this case, no distributions are required until the year in which the spouse reaches age 75 (or 70 1/2 if born before 7/1/1949, 72 if 7/1/1949 to 12/31/1951, 73 if born 1/1/1951 to 1/1/1960). When distributions do begin, the spouse can use the Uniform Lifetime Table, which produces longer life expectancies than the Single Life Expectancy table, to determine the applicable life expectancy. In addition, a spouse is able to 'recalculate' or lookup a new life expectancy from the Uniform Lifetime Table each year. This produces the lowest RMD in all but the most unusual situations. This calculator will always assume that a spouse does not wish to treat an inherited IRA as their own.
- Year of RMD
- The year to calculate the Required Minimum Distribution (RMD). This is typically the current year. Change the year to calculate a previous year's RMD.
- Beneficiary's name
- Please enter the account beneficiary's name.
- Beneficiary's birthdate
- Please enter the account beneficiary's birthdate.
- Name of account
- Please enter the name of the account for this analysis.
- Hypothetical rate of return
- This is the expected rate of return on your account. This is only used to help project your future account balances (which of course will impact your required minimum distribution). The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2023, had an annual compounded rate of return of 15.2%, including reinvestment of dividends. From January 1, 1970 to December 31st 2023, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.9% (source: www.spglobal.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
- Amount Subject to RMD
- Mutual fund accounts use the previous year-end value. Variable annuity contracts use the actuarial year-end contract value, which may include living and death benefits, when determining the RMD amount. For variable annuity contracts, contact the issuing company for this information.
- Date of the original account owner's death
- Please enter the date of the original account owner's death.
- Plan type
- Please enter the plan type. The plan type can affect distributions if the account owner is younger than the beneficiary and RMDs have already begun.
- Original account owner's birthdate
- Please enter the original account owner's birthdate.
