RMD Calculator (Uniform Lifetime Table)

Calculator

The 25 percent penalty

Before SECURE 2.0, the missed-RMD penalty was 50 percent of the shortfall – one of the harshest in the tax code. It is now 25 percent, dropping to 10 percent if you fix the error and file Form 5329 within two years. The penalty is on the amount you should have withdrawn but did not, not on the entire account. See IRS RMD FAQ.

The most common miss we see is a retiree with several IRAs at different custodians. RMDs from IRAs can be aggregated and taken from any one of them, but 401(k) RMDs must be taken from each plan separately. Mixing the two trips people up.

Roth accounts and inherited IRAs

Roth IRAs have no RMDs during the original owner’s lifetime. Starting in 2024, Roth 401(k)s also no longer require RMDs during the owner’s lifetime – a change from SECURE 2.0 worth noting if you have a workplace Roth balance.

Inherited IRAs follow different rules. The 10-year rule under SECURE Act means most non-spouse beneficiaries must fully distribute the inherited account within 10 years of the original owner’s death. For accounts inherited from someone already past their RMD start date, annual distributions during the 10-year window are also required. The IRS finalized this rule in 2024.

Strategy beyond the minimum

Taking only the RMD is not always the right call. Clients with multiple income sources sometimes benefit from withdrawing more in low-income years to fill up lower brackets before RMDs push them into higher ones later. QCDs (Qualified Charitable Distributions) of up to $108,000 in 2025 satisfy the RMD without adding to taxable income – useful if you would have given to charity anyway. We model this every year for retirees during planning.