Required Minimum Distribution (RMD) Calculators
December 21, 2006
December 31 is almost here and, as discussed in the Distributions installment of the ESOP Planning series, required minimum distributions (RMDs) need to be paid by December 31. There are a lot of online sources to help with the calculations of RMDs. Here are two RMD calculators that I found online.
- The first RMD calculator only requires you to enter the age as of December 31, 2006, and the balance as of December 31, 2005. This calculator will not handle the scenario of a spouse beneficiary that is more than ten years younger than the participant, as this scenario requires the usage of the Joint Expectancy tables.
- The second RMD calculator has more factors to input but is able to handle the above-mentioned scenario. The calculator will also estimate future RMDs and account balances based on your future estimated rate of return. You may need to install some updates to use this calculator.
While I have not thoroughly tested the calculators, I did perform one sample RMD calculation using this Uniform Lifetime Table, and my calculation agreed to the online calculators.
The IRS also has a Retirement Plans FAQs regarding the Required Minimum Distributions on their website.
The final installment of the ESOP Planning series is online.
If you have any comments, questions, or suggestions about required minimum distributions, the ESOP planning process, or this post, please let me know.