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Ask the Expert: Calculating required minimum distributions from IRAs

Everything I read about required minimum distributions (RMD) from your IRA says the amount is based on your age and the IRA's value on Dec. 31 of the previous year. What age should be used if the RMD is taken throughout the year, some withdrawals before your birthday and some afterward?

Use the age you'll be on Dec. 31 of the RMD year. It makes no difference whether distributions are taken before or after your birthday.

All the individual retirement account distributions taken between Jan. 1 and Dec. 31 of 2021 count toward your 2021 RMD, for example. If the 2021 RMD is your first RMD, the deadline is extended until April 1, 2022 — and the 2021 RMD amount doesn't change even if you take it in a lump sum in March 2022.

Let's say you turn 72 in 2021. To calculate your first RMD from your IRA, look at the actuarial table in IRS Publication 590 (Appendix B, "Uniform Lifetime Table"). It gives a 72-year-old a 25.6 life expectancy factor — so your 2021 RMD is your IRA's 2020 year-end balance divided by 25.6. If your IRA balance was $1 million, your 2021 RMD is $39,063. You can take it in small withdrawals throughout this year, or in a lump sum anytime before April 1, 2022.

But note: The deadline extension is only on the first RMD. Thereafter, all RMDs must be taken by Dec. 31.

Also note: In 2022, all IRA owners 72 and older must start using a new IRS Uniform Lifetime Table. The new table is more generous. If you turn 72 in 2022, for example, your life expectancy factor will be 27.4, so your first RMD from a $1 million IRA will be $36,496.

The bottom line

You only have to calculate your RMD once a year.

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