SuperCalc

Required Minimum Distribution Calculator 2025

Calculate your RMD requirements with SECURE Act 2.0 updates and project future distributions

SECURE Act 2.0 Updates for 2025:

  • RMD age increased to 73 (from 72) for those born after 1950
  • Age increases to 75 in 2033 for those born in 1960 or later
  • Penalty for missed RMDs reduced to 25% (from 50%)
  • 10% penalty if corrected within 2 years
  • Roth 401(k) accounts no longer subject to RMDs during owner's lifetime

Retirement Accounts

Understanding Required Minimum Distributions (RMDs) in 2025

A Required Minimum Distribution (RMD) is the minimum amount you must withdraw from your retirement accounts each year once you reach a certain age. The SECURE Act 2.0, signed into law in December 2022, made significant changes to RMD rules that affect retirees in 2025 and beyond.

Key Changes Under SECURE Act 2.0

  • Age 73 Start: If you were born between 1951-1959, RMDs now begin at age 73 (increased from 72)
  • Age 75 in 2033: If you were born in 1960 or later, RMDs will begin at age 75 starting in 2033
  • Reduced Penalties: The penalty for missing an RMD is reduced from 50% to 25% of the amount not withdrawn
  • Correction Window: If you correct a missed RMD within two years, the penalty is further reduced to 10%
  • Roth 401(k) Changes: Starting in 2024, Roth 401(k) accounts are no longer subject to RMDs during the owner's lifetime

Which Accounts Require RMDs?

Subject to RMDs:

  • Traditional IRAs
  • SEP IRAs
  • SIMPLE IRAs
  • 401(k) plans
  • 403(b) plans
  • 457(b) plans
  • Profit sharing plans
  • Other defined contribution plans

Not Subject to RMDs:

  • Roth IRAs (during owner's lifetime)
  • Roth 401(k)s (starting 2024)
  • Roth 403(b)s (starting 2024)
  • Accounts still held by current employer

How RMDs Are Calculated

The RMD calculation is straightforward but requires accurate information:

RMD = Account Balance ÷ Life Expectancy Factor

Account balance as of December 31 of the previous year

Step-by-Step Process:

  1. Determine your age: Use your age as of December 31 of the distribution year
  2. Find your life expectancy factor: Use the IRS Uniform Lifetime Table (most people) or Joint Life Table (if spouse is sole beneficiary and more than 10 years younger)
  3. Calculate total balance: Add up all traditional retirement account balances as of December 31 of the prior year
  4. Divide balance by factor: This gives you your minimum required distribution

Important Deadline:

Your first RMD must be taken by April 1 of the year following the year you turn 73. All subsequent RMDs must be taken by December 31 each year.

RMD Tax Strategies and Planning

Tax-Efficient RMD Strategies:

Qualified Charitable Distributions (QCDs)

  • Donate up to $100,000 directly from IRA to charity
  • Counts toward your RMD requirement
  • Not included in taxable income
  • Available starting at age 70½

Strategic Withdrawal Timing

  • Take RMDs early in low-income years
  • Delay first RMD if expecting lower income next year
  • Consider monthly withdrawals for dollar-cost averaging
  • Coordinate with other income sources

Common RMD Mistakes to Avoid:

  • Missing the deadline: Results in hefty penalties (25% of the amount not withdrawn)
  • Forgetting inherited accounts: Inherited IRAs have different RMD rules
  • Aggregation errors: You can aggregate IRA RMDs but not 401(k) RMDs
  • Wrong calculation date: Use December 31 balance of the prior year, not current balance
  • Ignoring still-working exception: May delay 401(k) RMDs if still employed

Advanced RMD Planning Strategies

Roth Conversions

Convert traditional IRA assets to Roth before RMD age to reduce future RMDs and create tax-free growth.

Asset Location

Hold tax-inefficient investments in IRAs and tax-efficient investments in taxable accounts.

Withdrawal Sequencing

Strategically withdraw from different account types to minimize lifetime taxes.

Year-End Planning Checklist:

  • Calculate RMD for each retirement account
  • Consider QCD opportunities if charitably inclined
  • Review tax withholding on RMD distributions
  • Coordinate RMD timing with other income
  • Document all RMD withdrawals for tax records

Frequently Asked Questions

Can I take more than the required minimum?

Yes, you can always withdraw more than the RMD. The RMD is just the minimum amount you must withdraw to avoid penalties.

Can I aggregate RMDs from multiple accounts?

You can calculate RMDs separately for each IRA but withdraw the total from one or more IRAs. However, 401(k) and 403(b) RMDs must be taken from each respective account.

What if I'm still working at 73?

If you're still working and don't own more than 5% of the company, you may be able to delay RMDs from your current employer's 401(k) until retirement. This doesn't apply to IRAs or former employer plans.

Do inherited IRAs have different rules?

Yes, inherited IRAs have different RMD rules depending on your relationship to the deceased and when they passed away. The SECURE Act significantly changed these rules for deaths after 2019.

How are RMDs taxed?

RMDs from traditional retirement accounts are taxed as ordinary income in the year withdrawn. The amount of tax depends on your total income and tax bracket.