RMD Calculator Formula & How It Works
RMD = Account Balance (Dec 31 prior year) ÷ IRS Life Expectancy Factor
- Life expectancy factors from IRS Uniform Lifetime Table
- Age 73: factor = 26.5 → RMD = 3.77% of balance
- Age 80: factor = 20.2 → RMD = 4.95% of balance
- Age 90: factor = 12.2 → RMD = 8.20% of balance
RMDs force gradual withdrawal from tax-deferred retirement accounts (traditional IRA, 401(k), 403(b), SEP IRA) starting at age 73. The annual RMD equals the prior year-end balance divided by the IRS life expectancy factor from the Uniform Lifetime Table. Failing to take the full RMD results in a 25% excise tax on the shortfall amount.