[OT]: Calculating RMD

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Boris

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Jul 9, 2021, 3:03:23 PMJul 9
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How does one calculate the Required Minimun Disbursement from a 401(k)
rollover or IRA?

Thanks.

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ira smilovitz

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Jul 9, 2021, 3:43:26 PMJul 9
to
On Friday, July 9, 2021 at 3:03:23 PM UTC-4, Boris wrote:
> How does one calculate the Required Minimun Disbursement from a 401(k)
> rollover or IRA?
>
> Thanks.
>
> --

See IRS Pub. 590-B. Conceptually, you take the balance in the account on December 31 of the previous year and multiply by a factor derived from the actuarial life expectancy based on your age on that December 31.

Ira Smilovitz, EA
Leonia, NJ

Boris

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Jul 9, 2021, 4:43:29 PMJul 9
to
ira smilovitz <ira.sm...@gmail.com> wrote in
news:8d22bd08-1c07-4f38...@googlegroups.com:

> On Friday, July 9, 2021 at 3:03:23 PM UTC-4, Boris wrote:
>> How does one calculate the Required Minimun Disbursement from a
>> 401(k) rollover or IRA?
>>
>> Thanks.
>>
>> --
>
> See IRS Pub. 590-B. Conceptually, you take the balance in the account
> on December 31 of the previous year and multiply by a factor derived
> from the actuarial life expectancy based on your age on that December
> 31.
>
> Ira Smilovitz, EA
> Leonia, NJ
>

Many thanks.

Rick

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Jul 9, 2021, 4:43:29 PMJul 9
to
"ira smilovitz" wrote in message
news:8d22bd08-1c07-4f38...@googlegroups.com...
>
>On Friday, July 9, 2021 at 3:03:23 PM UTC-4, Boris wrote:
>> How does one calculate the Required Minimun Disbursement from a 401(k)
>> rollover or IRA?
>>
>> Thanks.
>>
>> --
>
>See IRS Pub. 590-B. Conceptually, you take the balance in the account on
>December 31 of the previous year and multiply by a factor derived from the
>actuarial life expectancy based on your age on that December 31.
>
>Ira Smilovitz, EA
>Leonia, NJ
>

if you're below 80 and don't have the table handy you can get a rough
estimate by taking your balance as of the end of the prior year and dividing
that number by the difference between 98 and your age. For example, if you
have a $500,000 balance and you are 75 - divide $500,000 by 23 (98-75) and
you get roughly $21,700.

--

"\"Re...@home.com

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Jul 9, 2021, 4:43:29 PMJul 9
to
On 7/9/21 3:42 PM, ira smilovitz wrote:
> On Friday, July 9, 2021 at 3:03:23 PM UTC-4, Boris wrote:
>> How does one calculate the Required Minimun Disbursement from a 401(k)
>> rollover or IRA?
>>
>> Thanks.
>>
>> --
>
> See IRS Pub. 590-B. Conceptually, you take the balance in the account on December 31 of the previous year and multiply by a factor derived from the actuarial life expectancy based on your age on that December 31.
>
> Ira Smilovitz, EA
> Leonia, NJ
>


Umm...I believe one uses the age at the end of the tax year being filed.

See https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf

where it says:

1.IRA balance on December 31 of the *previous* year.$_________

2.Distribution period from the table below for your age on your birthday
*this year*.

Taxed and Spent

unread,
Jul 9, 2021, 5:03:30 PMJul 9
to
On 7/9/2021 1:40 PM, Boris wrote:
> ira smilovitz <ira.sm...@gmail.com> wrote in
> news:8d22bd08-1c07-4f38...@googlegroups.com:
>
>> On Friday, July 9, 2021 at 3:03:23 PM UTC-4, Boris wrote:
>>> How does one calculate the Required Minimun Disbursement from a
>>> 401(k) rollover or IRA?
>>>
>>> Thanks.
>>>
>>> --
>>
>> See IRS Pub. 590-B. Conceptually, you take the balance in the account
>> on December 31 of the previous year and multiply by a factor derived
>> from the actuarial life expectancy based on your age on that December
>> 31.
>>
>> Ira Smilovitz, EA
>> Leonia, NJ
>>
>
> Many thanks.
>

I am surprised nobody mentioned there are a jillion RMD calculators on
line. Here is one:

https://www.kiplinger.com/kiplinger-tools/retirement/t032-s000-minimum-ira-distribution-calculator-what-is-my-min/index.php

There are others that will estimate RMDs over a number of years based on
an assumed rate of return for your account.

Rick

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Jul 9, 2021, 5:43:33 PMJul 9
to
wrote in message news:R-6dndNQbc0XM3X9...@giganews.com...
>
>On 7/9/21 3:42 PM, ira smilovitz wrote:
>> On Friday, July 9, 2021 at 3:03:23 PM UTC-4, Boris wrote:
>>> How does one calculate the Required Minimun Disbursement from a 401(k)
>>> rollover or IRA?
>>>
>>> Thanks.
>>>
>>> --
>>
>> See IRS Pub. 590-B. Conceptually, you take the balance in the account on
>> December 31 of the previous year and multiply by a factor derived from
>> the actuarial life expectancy based on your age on that December 31.
>>
>> Ira Smilovitz, EA
>> Leonia, NJ
>>
>
>
>Umm...I believe one uses the age at the end of the tax year being filed.
>
>See https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf
>
>where it says:
>
>1.IRA balance on December 31 of the *previous* year.$_________
>
>2.Distribution period from the table below for your age on your birthday
>*this year*.
>

I think that's correct. The "end of prior year" date only comes into play
for determination of the IRA balance. It's the age in the current tax year
that determines the line you choose from in the table. So if I turn 72 in
2021, then I use age 72 in the table but I use my total account balance
total as of the end of 2020.

--

ira smilovitz

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Jul 9, 2021, 5:48:33 PMJul 9
to
I should know better than to post something without double checking it.

Ira Smilovitz, EA
Leonia, NJ

Boris

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Jul 9, 2021, 11:13:52 PMJul 9
to
Taxed and Spent <nospam...@nonospam.com> wrote in
news:scacvt$vs0$1...@dont-email.me:

> On 7/9/2021 1:40 PM, Boris wrote:
>> ira smilovitz <ira.sm...@gmail.com> wrote in
>> news:8d22bd08-1c07-4f38...@googlegroups.com:
>>
>>> On Friday, July 9, 2021 at 3:03:23 PM UTC-4, Boris wrote:
>>>> How does one calculate the Required Minimun Disbursement from a
>>>> 401(k) rollover or IRA?
>>>>
>>>> Thanks.
>>>>
>>>> --
>>>
>>> See IRS Pub. 590-B. Conceptually, you take the balance in the
>>> account on December 31 of the previous year and multiply by a factor
>>> derived from the actuarial life expectancy based on your age on that
>>> December 31.
>>>
>>> Ira Smilovitz, EA
>>> Leonia, NJ
>>>
>>
>> Many thanks.
>>
>
> I am surprised nobody mentioned there are a jillion RMD calculators on
> line. Here is one:
>
> https://www.kiplinger.com/kiplinger-tools/retirement/t032-s000-minimum-
> ira-distribution-calculator-what-is-my-min/index.php
>
> There are others that will estimate RMDs over a number of years based
> on an assumed rate of return for your account.
>

Oh, I'll have to check it out. See if it agrees, somewhat, with the IRS
calcs.

Thanks.

Boris

unread,
Jul 9, 2021, 11:13:52 PMJul 9
to
"Rick" <ri...@nospam.com> wrote in news:sca9md$1jrr$1...@gioia.aioe.org:

> "ira smilovitz" wrote in message
> news:8d22bd08-1c07-4f38...@googlegroups.com...
>>
>>On Friday, July 9, 2021 at 3:03:23 PM UTC-4, Boris wrote:
>>> How does one calculate the Required Minimun Disbursement from a
>>> 401(k) rollover or IRA?
>>>
>>> Thanks.
>>>
>>> --
>>
>>See IRS Pub. 590-B. Conceptually, you take the balance in the account
>>on December 31 of the previous year and multiply by a factor derived
>>from the actuarial life expectancy based on your age on that December
>>31.
>>
>>Ira Smilovitz, EA
>>Leonia, NJ
>>
>
> if you're below 80 and don't have the table handy you can get a rough
> estimate by taking your balance as of the end of the prior year and
> dividing that number by the difference between 98 and your age. For
> example, if you have a $500,000 balance and you are 75 - divide
> $500,000 by 23 (98-75) and you get roughly $21,700.
>
> --
>

That's convenient, and it worked for my situation. My answer makes
sense.

Thanks.

Boris

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Jul 9, 2021, 11:13:52 PMJul 9
to
"\"Retired"@home.com wrote in
news:R-6dndNQbc0XM3X9...@giganews.com:

> On 7/9/21 3:42 PM, ira smilovitz wrote:
>> On Friday, July 9, 2021 at 3:03:23 PM UTC-4, Boris wrote:
>>> How does one calculate the Required Minimun Disbursement from a
>>> 401(k) rollover or IRA?
>>>
>>> Thanks.
>>>
>>> --
>>
>> See IRS Pub. 590-B. Conceptually, you take the balance in the account
>> on December 31 of the previous year and multiply by a factor derived
>> from the actuarial life expectancy based on your age on that December
>> 31.
>>
>> Ira Smilovitz, EA
>> Leonia, NJ
>>
>
>
> Umm...I believe one uses the age at the end of the tax year being
> filed.
>
> See https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf
>
> where it says:
>
> 1.IRA balance on December 31 of the *previous* year.$_________
>
> 2.Distribution period from the table below for your age on your
> birthday *this year*.
>

Thanks.

Boris

unread,
Jul 9, 2021, 11:18:52 PMJul 9
to
ira smilovitz <ira.sm...@gmail.com> wrote in
news:7e284818-d919-4c81...@googlegroups.com:
No worries. At this point, I was just looking for a ball park figure. I
had no idea how this was calculated. Not a clue. I'm 69 1/2, and wanted
to see what I'll be required to pay taxes on. My wife is also 69 1/2.

I thought that the age when one was required to take RMD was at 70 1/2.
Guess it changed while I wasn't looking. When I'm ready to take the RMD,
the upper age, now 98, may be higher. Who knows.

John Levine

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Jul 10, 2021, 12:43:57 AMJul 10
to
According to Taxed and Spent <nospam...@nonospam.com>:
>I am surprised nobody mentioned there are a jillion RMD calculators on
>line. Here is one:
>
>https://www.kiplinger.com/kiplinger-tools/retirement/t032-s000-minimum-ira-distribution-calculator-what-is-my-min/index.php
>
>There are others that will estimate RMDs over a number of years based on
>an assumed rate of return for your account.

In my experience, the custodian will often compute the RMD for you. I have an inherited IRA at Vanguard and the RMDs
are all on autopilot after a one-time setup.

--
Regards,
John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly

Alan

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Jul 10, 2021, 3:19:50 PMJul 10
to
On 7/9/21 11:58 AM, Boris wrote:
> How does one calculate the Required Minimum Disbursement from a 401(k)
> rollover or IRA?
>
> Thanks.
>
Over and above the other replies, you do need to know some other facts
about minimum required distributions (MRDs) from IRAs and 401(k)s.
While we are at it, let's throw in 403(b)s.

Excluding inherited IRAs, MRDs from your non-Roth IRAs can all get
combined. I.e., after you calculate the MRD for each of your non-Roth
IRAs (traditional IRAs, SEP IRAs, and SIMPLE IRAs), you can total them
up and take that total MRD from any combination of those accounts.
Inherited IRAs have their own calculation (different set of rules) and
you must take the MRD from the inherited IRA.

403(b)s work like the above IRAs. You calculate the MRD from each
403(b, get a total and take the total MRD from any combination of the
403(b)s.

401(k)s work slightly differently. You calculate the MRD from each
company 401(k) and you MUST take each company's MRD from that company's
401(k).

Roger Fitzsimmons

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Jul 21, 2021, 10:46:34 PMJul 21
to
On Saturday, July 10, 2021 at 3:19:50 PM UTC-4, Alan wrote:
> On 7/9/21 11:58 AM, Boris wrote:
> > How does one calculate the Required Minimum Disbursement from a 401(k)
> > rollover or IRA?
> >
> > Thanks.
> >
> Over and above the other replies, you do need to know some other facts
> about minimum required distributions (MRDs) from IRAs and 401(k)s.
> While we are at it, let's throw in 403(b)s.
>
> Excluding inherited IRAs, MRDs from your non-Roth IRAs can all get
> combined. I.e., after you calculate the MRD for each of your non-Roth
> IRAs (traditional IRAs, SEP IRAs, and SIMPLE IRAs), you can total them
> up and take that total MRD from any combination of those accounts.
> Inherited IRAs have their own calculation (different set of rules) and
> you must take the MRD from the inherited IRA.
>
> 403(b)s work like the above IRAs. You calculate the MRD from each
> 403(b, get a total and take the total MRD from any combination of the
> 403(b)s.
>
> 401(k)s work slightly differently. You calculate the MRD from each
> company 401(k) and you MUST take each company's MRD from that company's
> 401(k).

Most custodians will do it for you if you want them to. I told my custodian to take my RMD on November 30 and put it in my taxable account. Of course RMD's were waived for 2020. I have two IRA's subject to RMD's, both are inherited (one traditional one Roth). It will only work if the custodian had the account as of 12/31 of the prior year.

Bill W.

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Jul 22, 2021, 10:22:16 AMJul 22
to
On Friday, July 9, 2021 at 5:43:33 PM UTC-4, Rick wrote:
> wrote in message news:R-6dndNQbc0XM3X9...@giganews.com...
> >
> >On 7/9/21 3:42 PM, ira smilovitz wrote:
> >> On Friday, July 9, 2021 at 3:03:23 PM UTC-4, Boris wrote:
> >>> How does one calculate the Required Minimun Disbursement from a 401(k)
> >>> rollover or IRA?
> >>>
> >>> Thanks.
> >>>
> >>> --
> >>
> >> See IRS Pub. 590-B. Conceptually, you take the balance in the account on
> >> December 31 of the previous year and multiply by a factor derived from
> >> the actuarial life expectancy based on your age on that December 31.
> >>
> >> Ira Smilovitz, EA
> >> Leonia, NJ
> >>
> >
> >
> >Umm...I believe one uses the age at the end of the tax year being filed.
> >
> >See https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf
> >
> >where it says:
> >
> >1.IRA balance on December 31 of the *previous* year.$_________
> >
> >2.Distribution period from the table below for your age on your birthday
> >*this year*.
> >
> I think that's correct. The "end of prior year" date only comes into play
> for determination of the IRA balance. It's the age in the current tax year
> that determines the line you choose from in the table. So if I turn 72 in
> 2021, then I use age 72 in the table but I use my total account balance
> total as of the end of 2020.
Don't forget RMD fans, you can combine RMD's and withdraw the total amount from one IRA account. Make good notes or you will forget you did thatl

bw

JoeTaxpayer

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Jul 22, 2021, 11:12:20 AMJul 22
to
On 7/22/21 10:17 AM, Bill W. wrote:

> Don't forget RMD fans, you can combine RMD's and withdraw the total amount from one IRA account. Make good notes or you will forget you did that
>
> bw

Yes. To be very pedantic, like accounts can be grouped. Roths in one
group, Traditional IRAs, and each inherited IRA. I strongly advise
people to reduce the number of accounts as they get older. I've seen
people who literally (to them) "opened an IRA" each year, and had over
25 different accounts to look at during retirement. Crazy.
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