This online IRA Withdrawal Calculator will attempt to forecast your future required withdrawals if you are an IRA owner age 70-1/2 or older.
If you are age 70-1/2 or older, but would just like to calculate an estimate of the current year's required minimum distribution, see the IRA RMD Calculator.
If you are younger than age 70-1/2 but would like to forecast the effect required withdrawals will have on your present or future retirement, please use the IRA Distribution Calculator instead.
If you are the owner of a Traditional IRA or 401k you are required to begin making minimum withdrawals (distributions) from your IRA at age 70-1/2 (70 if your birthday falls on or before June 1st, 71 if your birthday falls on or after July 1st).
The actual amount you are required to withdraw is based on the IRS's determination of your life expectancy. IRS Publication 590-B (2014) (opens new window) provides 3 different tables from which to determine your life expectancy. Your life expectancy changes (gets smaller) the older you get, so this calculator looks up your withdrawal factor at each future age, and then divides each forecasted IRA year-end balance by the corresponding factor to build a table of projected withdrawals.
The IRA withdrawal calculator uses the Joint Life and Last Survivor Expectancy Table if your spouse is the sole beneficiary and is more than 10-years younger than you. Otherwise the calculator will use the Uniform Lifetime Table.
Please keep in mind that the forecasted results of this calculator are merely estimates and are not to be used for calculating your actual minimum withdrawal amount. Consult your plan administrator for the exact amount required.
With that, let's use the IRA Withdrawal Calculator to forecast your future required minimum withdrawals.
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Minimum Withdrawal Requirement: Otherwise known as Minimum Distribution Requirements (RMDs), minimum withdrawal requirements come into play when an owner of a qualifying retirement plan reaches age 70-1/2, and in cases where a beneficiary assumes or inherits an IRA from the deceased owner. The withdrawal for the first year of the required distribution period can be deferred to the following year (for tax purposes), but must be withdrawn before April 1st. After that withdrawals must me made prior to December 31st. The penalty for insufficient distributions is 50% of the undistributed amount. For Traditional IRA's, withdrawals will increase your taxable income for the year they are withdrawn.
Minimum Withdrawal Formula: In order to forecast the amounts of your required minimum distributions, you first need to look up your life expectancy factor in the IRS life expectancy tables -- one for each year you want to forecast. Then for each year, multiply the beginning balance by your expected return on investment (beginning balance x (1 + ROI)). Finally, divide each year-end balance of your IRA by the corresponding factor. Each result is the forecasted amount you well be required to withdraw from your IRA for that year.
Expected annual return: The is the percentage by which you expect your IRA to grow each year. As with all financial forecasting, it is always best to forecast income low and expenses high. Therefore I suggest using a very conservative figure for expected annual return.
IRS Life Expectancy Tables: Tables provided by IRS Publication 590-B for determining minimum withdrawal requirements for qualifying retirement plans. They are the the Single, the Joint Life and Last Survivor, and the Uniform Lifetime Table.