Banking Your Way

How Do I Calculate Required Minimum Distribution (RMD)?

The IRS requires you to start taking distributions out of your Traditional IRA account the year you reach the age of 70.5. The deadline for taking the first RMD is April 1 of the following year, for all other RMDs the deadline is December 31 of each year. Please remember if you delay the first RMD until April 1 you will be required to take two taxable distributions, one distribution for the year you turn 70.5 and for the next year at age 71.

The calculation for figuring out your RMD follows: Take your Beginning Year Balance of the year you turn 70.5 and divide it by the factor found on the IRS Uniform Lifetime Table. The answer is your required amount for that year. This figure is only the required amount, you may elect to take more if desired. For example:

BYB                                                    $10,000.00

Uniform Lifetime Table                                 27.4

RMD for the year                               $     364.96

Using the example above, the following year you would look on the chart and use 26.5 for the factor and so on.

REQUIRED MINIMUM DISTRIBUTIONS FOR IRAS

Age of Retiree
Distribution period (in years)
Age of Retiree
Distribution Period (in years)
70 27.4 93  9.6
71 26.5 94 9.1
72 25.6 95 8.6
73 24.7 96 8.1
74 23.8 97 7.6
75 22.9 98 7.1
76 22.0 99 6.7
77 21.2 100 6.3
78 20.3 101 5.9
79 19.5 102 5.5
80 18.7 103 5.2
81 17.9 104 4.9
82 17.1 105 4.5
83 16.3 106 4.2
84 15.5 107 3.9
85 14.8 108 3.7
86 14.1 109 3.4
87 13.4 110 3.1
88 12.7 111 2.9
89 12.0 112 2.6
90 11.4 113 2.4
91 10.8 114 2.1
92 10.2 115 or older 1.9

Facts to remember about RMDs:

  • If you have more than one IRA, either at the same bank or different financial institutions, you may add all the accounts together and calculate a grand total for the year. Then you can choose which account to take the funds from.  You do not have to take money from each account. Some financial institutions may require you to sign a waiver if you are aggregate your accounts together.
  • At The First National Bank, you can sign up for automatic distribution each year. The First National Bank will do the calculation automatically and either mail a check or deposit the funds into another account for you each year. We do not charge any fees for the process nor do you pay any bank penalties if your account is in a Certificate of Deposit and has not reached its maturity. We offer monthly, quarterly, semiannual and annual payments.
  • Please remember, the IRS requires you to start distributions at the age of 70.5, if you ignore this rule you will be penalized 50% of the required amount.

Please feel free to contact us at any of our locations if you have questions concerning this subject. We will be more than happy to sit down and discuss it with you.