- Calculation notes
- **2024_RMD_CALCULATION_NOTE**
- Year of RMD
- The year for the RMD calculation. This is usually the current year, but past and future year RMDs can be calculated by changing this value.
- Name of account
- Enter the account name if you would like it to appear on the report.
- Owner's name
- Enter the account owner's name if you would like it to appear on the report.
- Owner's birthdate
- The account owner's birthdate. The tool uses this to calculate the account owner's age as of December 31st of the distribution year.
- Amount subject to RMD
- This is the fair market value of the account as of the close of business on December 31st of the prior year. For example, to determine the RMD for 2024, use the account balance as of 12/31/2023. For traditional IRAs, no adjustments are made for contributions or distributions after that date. If you made a transfer or rollover from one account on or before December 31st of the prior year and the funds were received by a new account in the next year, you will need to increase your December 31st fair market value by the amount that was transferred or rolled over and not included in the December 31st value of either account.
- Plan type
- This is the plan type for the account. It is a factor in determining if an RMD is required. For a ROTH IRA, no RMD has ever been required from the original account owner. All other ROTH plan types follow the normal RMD rules through 2023. ROTH plans of all types have eliminated RMDs for the original account owner for years 2024 and later.
- Hypothetical rate of return
- This is the expected rate of return on the account balance. This is only used to help project future account balances (which of course will impact required minimum distributions). 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.
- Is sole beneficiary a spouse?
- Check this box if the sole beneficiary is a spouse. The IRS uniform life expectancy table is used to calculate the life expectancy for account owner RMDs. The only exception to this rule is if the sole beneficiary is a spouse and is more than 10 years younger than the account owner. In this situation, the IRS joint life expectancy table is used. The IRS joint life expectancy table normally produces lower required distributions.
- Beneficiary's birthdate
- If the sole beneficiary of the account is a spouse, enter the beneficiary's birthdate. If the spouse is more than 10 years younger than the account owner, the IRS joint life expectancy table is used which normally produces lower required distributions.
