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Ted, you just ruined my Sunday. For some inexplicable reason, I always thought the RMD was a flat 2.5% of your account each year. Now I see it is much more than that and hence more taxes to pay. At least I have 4 and a 1/2 more years to prepare for Armageddon. Here's a link to another nice table to compute the RMD.
There are a variety of gotchas that won't affect most people, but one should nevertheless be aware of:
- You must calculate the RMD for each account separately (because a different table, i.e. divisor, may be used for different accounts, depending on whom the beneficiary is and the age of the beneficiary)
- A completely different calculation applies to inherited IRAs (unless you've adopted them as your own, as you are allowed to do when inheriting from a spouse)
- While you may take your IRA RMD from any or all of your traditional IRAs, and you may take your 401(k) RMD from any or all of your traditional 401(k)s, you may not take your traditional IRA RMD from your 401(k) or vice versa. These are two completely separate sets of accounts, even though they are both retirement accounts.
- If you are doing Roth conversions, you must take the RMD from your account each year prior to withdrawing additional money for the Roth conversion
Then there are the corner cases - the year you turn 70.5, the year you die. That's beyond the scope of this post
Comments
http://apps.finra.org/Calcs/1/RMD
- You must calculate the RMD for each account separately (because a different table, i.e. divisor, may be used for different accounts, depending on whom the beneficiary is and the age of the beneficiary)
- A completely different calculation applies to inherited IRAs (unless you've adopted them as your own, as you are allowed to do when inheriting from a spouse)
- While you may take your IRA RMD from any or all of your traditional IRAs, and you may take your 401(k) RMD from any or all of your traditional 401(k)s, you may not take your traditional IRA RMD from your 401(k) or vice versa. These are two completely separate sets of accounts, even though they are both retirement accounts.
- If you are doing Roth conversions, you must take the RMD from your account each year prior to withdrawing additional money for the Roth conversion
Then there are the corner cases - the year you turn 70.5, the year you die. That's beyond the scope of this post