- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Retirement tax questions
The RMD is based on your life expectancy. Use table 1 in appendix B of publication 590-B. You should be age 65 in 2024, so your life expectancy is 22.9 years. That means you need to withdraw at least 1/22.9th (or 4.37%) of the account. Next year when you are 66, your life expectancy would be 22.0 years, and you would be required to withdraw 4.55% of the account.
RMDs are designed to increase over time as your life expectancy shortens, so the account holder uses up the account around the time they die. It's intended to discourage/prevent passing a huge tax-free account to the heirs. You kind of short-circuit that expectation, because the 10 year rule means you won't even get close to withdrawing all the money by the end of the 10 years, if you only take RMDs. But that's how the RMD calculation works, whether you are the original owner or the heir.
You may want to withdraw more than the RMD anyway, because if you wait until 2032 when you have to withdraw it all, it might put you in a higher tax bracket.