Required minimum distribution
By Jude Wallis
A required minimum distribution is the least that must leave certain retirement accounts in a year, found by dividing the prior year-end balance by an IRS life-expectancy factor.
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The identity is a division. The balance is the figure on the previous 31 December. The divisor is the factor from the table that applies to the owner for the distribution year. For most original owners that table is the IRS Uniform Lifetime Table.
An RMD is a floor, not a spending plan. Taking more does not create a credit against a later year. Roth IRAs have no lifetime RMD for the original owner in the United States. Inherited accounts follow a different branch.
The account is tax deferred until the money leaves. How required minimum distributions work is the explainer. The RMD calculator applies the division.