RMD Methodology: How Required Minimum Distributions Are Calculated

Quick Answer: A required minimum distribution is your prior year-end balance divided by a distribution-period factor from the IRS Uniform Lifetime Table: RMD = balance ÷ distribution period. For a 75-year-old with a $500,000 balance, the factor is 24.6, so the engine returns an RMD of $20,325.20. Because the factor shrinks every year, the required amount climbs as you age even if your balance stays flat. Miss it and the SECURE 2.0 excise tax is 25% of the shortfall -- $5,081.30 in this case. This page shows the complete math behind every number our calculator produces.

Calculate Your Own RMD →

For decades the government let you defer taxes on money in a Traditional IRA or 401(k). A required minimum distribution is how it eventually collects: once you reach your starting age, you must pull a minimum amount out of the account each year so it can be taxed.

The math is a single division. The IRS publishes a table that translates your age into a "distribution period" -- roughly an estimate of your remaining life expectancy in years. You divide your account balance by that number:

1. Take your account balance as of December 31 of the prior year.
2. Look up the distribution-period factor for your age this year.
3. Divide the balance by the factor -- that is your RMD.

Because the factor gets smaller every year (a 73-year-old divides by 26.5, a 90-year-old by 12.2), you are required to withdraw a larger share of the account as you age. The IRS required minimum distributions page(opens in new tab) is the authoritative reference for these rules.

Here is the exact formula used by our RMD Calculator:

where distributionPeriod is the factor the engine looks up for your age in the IRS Uniform Lifetime Table:

The penalty for skipping the distribution is a fixed share of the RMD. Our MCP tool (rmd_distribution_amount) returns it as a field, to the cent; the on-page calculator states the same 25% figure, rounded to the dollar, in its Key Takeaways. Both use the full 25% rate, not the reduced 10% rate that applies after a timely correction:

Three rules the engine applies exactly:

• Prior year-end balance: the balance used is always the value on December 31 of the previous year, not today's balance.
• Age flooring: a fractional age is floored to a whole number before the table lookup (Pub. 590-B uses integer ages).
• Zero balance: a $0 balance returns a $0 RMD. The MCP tool still reports the distribution period for transparency; the on-page calculator does not.

This section walks through every step using a common retiree case. You can follow along with a standard calculator and verify the result against our RMD Calculator.

Step 1: Take the Prior Year-End Balance

Step 2: Look Up the Distribution Period

Find the owner's age in the IRS Uniform Lifetime Table.

Step 3: Divide to Get the RMD

Step 4: Compute the Missed-RMD Penalty

Read together: this retiree must withdraw at least $20,325.20 from the account this year -- about 4.07% of the balance. Skipping it entirely would cost $5,081.30 in excise tax (reduced to $2,032.52 if corrected within the IRS window). The RMD and distribution period above were produced by the calculator's engine with inputs owner age = 75, account balance = $500,000 (verified July 5, 2026); the penalty is the MCP tool's penaltyIfMissed for the same inputs, which the calculator shows as roughly $5,081.

Run this example in the RMD Calculator

Verify This With Our RMD Calculator →

Age is the lever that makes RMDs climb over time. The table below holds the balance fixed at $500,000 and varies only the owner's age, so you can see the distribution-period factor shrink and the required amount grow. The distribution period and RMD in every row were computed by the calculator's engine; the penalty column is the MCP tool's 25% figure for the same inputs.

On the same $500,000, the required withdrawal more than doubles between age 73 and age 90 -- from $18,867.92 to $40,983.61 -- purely because the divisor falls from 26.5 to 12.2. In practice the balance also changes each year, so retirees usually recompute the RMD annually with the new December 31 balance and the new age.

Two pieces of IRS machinery sit behind every RMD: the table that supplies the divisor, and the SECURE 2.0 rules that set when RMDs begin and what missing one costs.

Uniform Lifetime Table (selected ages)

This is the post-2022 Pub. 590-B Table III the engine uses. It applies to most owners taking RMDs from their own accounts.

SECURE 2.0: Starting Age and Penalty

The SECURE 2.0 Act reshaped two RMD rules the engine reflects:

• Starting age tiers — born 1951-1959, RMDs start at 73; born 1960 or later, they start at 75; born 1950 or earlier, the prior age-70.5 / 72 rules applied.
• Reduced excise tax — the penalty for a missed RMD dropped from 50% to 25% of the shortfall (SECURE 2.0 §302; Internal Revenue Code §4974(a)). It falls to 10% if you take the missed amount and file a return reflecting the tax during the correction window, which ends at the earliest of the IRS mailing a notice of deficiency, the IRS assessing the tax, or the last day of the second tax year after the year the tax is imposed (§4974(e)). The IRS can also waive the tax if the shortfall came from reasonable error and you are taking reasonable steps to fix it (§4974(d)).

The engine implements the single-year Uniform Lifetime path only. The Joint Life Expectancy Table -- used when your sole beneficiary is a spouse more than 10 years younger -- and inherited-IRA rules are separate; see our inherited IRA RMD rules guide for those.

Our RMD Calculator applies the Uniform Lifetime Table and SECURE 2.0 rules documented above. The engine carries full precision through the division and rounds the RMD to the cent.

Calculation Engine

The same distribution logic runs in the browser and in our public calculator API / MCP server (tool: rmd_distribution_amount — full input/output schema in the API reference), so the RMD and distribution period are identical wherever you access them. What each returns differs. The on-page calculator shows the RMD, the distribution period, your RMD deadline and the balance left after the withdrawal, plus the multi-year projection described below, and states the 25% penalty on that RMD rounded to the dollar. The MCP tool returns the RMD amount, the distribution period, the table used, and the missed-RMD penalty to the cent. As a reproducibility check, the worked example and every table figure on this page were generated by that engine (verified July 5, 2026).

Reference Data

• The distribution-period factors come from the IRS Publication 590-B Uniform Lifetime Table (Table III, post-2022 version)(opens in new tab).
• The starting-age tiers and the reduced excise tax are set by the SECURE 2.0 Act, summarized on the IRS RMD page(opens in new tab).

Assumptions and Limitations

• The core calculation is a single-year RMD — one balance, one age, one distribution period. The RMD calculator then builds a multi-year projection on top of it, and shows the result as a year-by-year table and chart: for each projected year it takes that year's RMD (zero before your start age), applies your assumed rate of return to what is left, and carries the year-end balance forward as the next year's starting balance, stopping early if the account depletes. You do not need to re-run it once per year of retirement. What the projection cannot know is the future: the rate of return is an assumption you supply, not a forecast, and contributions, rollovers, market losses and changes to the table will all move the later years.
• Only the Uniform Lifetime Table is implemented. The Joint Life Expectancy Table (sole-beneficiary spouse 10+ years younger) and inherited-IRA schedules are out of scope.
• The balance used is the prior December 31 value; adjustments for certain rollovers or recharacterizations are not modeled.
• RMDs are ordinary income in the year taken; this tool reports the required amount, not the tax you will owe on it.

Check It Yourself

The question. You were born in 1951, and your traditional IRA held $500,000 on December 31, 2025. What's your required minimum distribution (RMD) for 2026?

Our answer. In the RMD Calculator, enter birth year 1951, account type Traditional IRA and a balance of $500,000. It shows a distribution period of 24.6 and a 2026 required minimum distribution of $20,325, which is $20,325.20 rounded to the dollar.

The source. IRS Publication 590-B(opens in new tab) tells IRA owners to figure the RMD by dividing the account balance as of December 31 of the previous year by the distribution period for their age. Table III (Uniform Lifetime) in Appendix B gives a distribution period of 24.6 at age 75. Table III applies to most IRA owners; if your spouse is your only designated beneficiary and is more than 10 years younger than you, Publication 590-B says to use Table II instead, which gives a lower RMD.

Reproduce it. Your age in 2026 is 2026 − 1951 = 75. Find age 75 in Table III (24.6), then divide: $500,000 ÷ 24.6 = $20,325.20, the same figure the worked example above reaches. In a spreadsheet, =500000/24.6 returns 20,325.20. If your figure differs from ours, email admin@markcolabs.com with the inputs you used and the figure you got, and we'll compare it against the table.

Run this example in the RMD Calculator

• Internal Revenue Service -- Required Minimum Distributions (RMDs)(opens in new tab)
• IRS Publication 590-B -- Distributions from IRAs (Uniform Lifetime Table III)(opens in new tab)
• IRS -- Retirement Plan and IRA Required Minimum Distributions FAQs(opens in new tab)
• 26 U.S. Code §4974 -- Excise tax on certain accumulations in qualified retirement plans (25% rate, 10% correction rate, correction window, waiver)(opens in new tab)

Disclaimer: This content is for educational and informational purposes only and does not constitute financial, tax, or legal advice. Individual circumstances vary, and you should consult with a qualified tax or financial professional before taking or skipping a distribution. RMD rules, starting ages, and penalties are set by the IRS and can change; the figures here reflect the SECURE 2.0 rules and the post-2022 Uniform Lifetime Table current for 2026. While we strive for accuracy, laws and regulations change over time. Data current as of July 2026.

Content reviewed by Mark at Markco Labs. Learn more about our accuracy standards.