Let’s say you did a great job of not having to dip into that IRA of yours and now you’re 70 1/2.  What next?  How much are you suppose to take out to satisfy your Required Minimum Distribution or RMD?

I’ll do my best to show you how to calculate your RMD.  The factor used in this calculation is based on the single life expectancy table.  That factor or number is what we’ll need and is also labeled “Distribution Period (in years)” on the previous post.

Let’s say Joe, has $150,000 still remaining in his individual retirement account.  Based on the previous RMD table, a 70 1/2 year old retiree has a 27.4 years of distribution factor that is used to calculate his required minimum distribution.  Grab your calculators folks… we just simply take that $150,000 and we divide it by 27.4 to get your RMD for that year.

(Drum-roll please)… my handy calculator spits out $5,474.45 as the magic number for that year.  So Joe, has to take out at least that much out of his IRA to satisfy his RMD for that year.  The more difficult question now would be, what will Joe do with his $5,474.45?  Should he go on a nice vacation with the wife or should he spend that hard earned money buying Christmas presents for the grand-kids?  I would say (C) let’s do both of the above!

I hope you find this helpful.  Please leave a comment or contact me with any questions or concerns.

Still Need Help With  Calculating Your RMD?

Ask Binh

Binh Nguyen

(832) 273-3392

admin@401krollovers.info

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