How Required Minimum Distributions Are Calculated

The IRS requires you to withdraw a minimum amount from most retirement accounts each year after age 73. How to calculate required minimum distributions boils down to one simple formula: divide your account’s December 31 balance by a life-expectancy divisor from the IRS Uniform Lifetime Table.

The two pieces of the formula

Every RMD calculation has exactly two inputs. The first is straightforward: the balance of your retirement account as of December 31 of the preceding calendar year. If you’re calculating your 2026 RMD, you look at what your traditional IRA, 401(k), SEP-IRA, or other qualified account held on December 31, 2025.

The second input is your life-expectancy divisor, which comes from the IRS Uniform Lifetime Table. This table assumes you will live to a certain age based on actuarial data. The IRS publishes three versions—Uniform Lifetime, Single Life Expectancy, and Joint Life Expectancy—but most people use Uniform Lifetime. You find your current age as of December 31 in the distribution year and look up its corresponding divisor. At 73, that divisor is 27.4. At 80, it’s 20.2. At 90, it’s 11.4.

The calculation itself is elementary: December 31 balance × (1 ÷ divisor) = RMD. Or simply: balance ÷ divisor = RMD. That quotient is your required minimum distribution for that tax year.

Why December 31 of the prior year?

The valuation date matters. The IRS uses the December 31 balance of the previous year because it gives you certainty: you know exactly what you owe before the tax year begins. If the market rises in January, you don’t owe more. If it falls, you don’t owe less. That stability is intentional—it prevents people from scrambling to calculate RMDs as market conditions shift mid-year.

In practice, this means that if markets drop sharply in December, your RMD obligation is already locked in. Conversely, if you make a large contribution early in the distribution year, that new money doesn’t affect this year’s RMD but will increase next year’s obligation.

The Uniform Lifetime Table in action

The table itself covers ages 72 through 120+. Here’s a small sample:

The divisor shrinks as you age because the IRS assumes a shorter remaining lifespan. A 73-year-old is statistically expected to live longer than a 90-year-old, so the divisor is larger (27.4 vs. 11.4), which means a smaller withdrawal percentage.

To illustrate: suppose you are 75 years old on December 31, 2025, and your traditional IRA is worth $500,000 on that date. Your 2025 RMD is $500,000 ÷ 24.6 = $20,325.20. That’s the minimum you must withdraw (or have distributed) by December 31, 2025.

Multiple accounts and aggregation

If you own several retirement accounts—say, a traditional IRA and a 401(k)—you calculate each RMD separately. You find the December 31 balance of the IRA, divide by the divisor for your age, and get RMD-IRA. You do the same for the 401(k) and get RMD-401k.

However, here’s an important nuance: for IRAs (traditional, SEP, and SIMPLE), you can aggregate them. You add up all your traditional IRA balances as of December 31, then divide by the single divisor. You only need to withdraw the total RMD from one or more of those IRAs—the IRS doesn’t care which. With 401(k)s and other employer-sponsored plans, aggregation is typically not allowed, so each must satisfy its own RMD.

This flexibility with IRAs can be useful. If you have a large IRA and a small one, you could withdraw the entire RMD from the larger account and leave the smaller one untouched for the year.

Life expectancy assumptions and when they change

The IRS periodically updates the Uniform Lifetime Table to reflect changing mortality rates. The most recent substantial update came in 2022, with new divisors taking effect in 2022 (later for those who deferred RMDs). The divisors generally increased slightly, meaning lower RMD percentages—a person turning 75 in 2022 faced a smaller withdrawal obligation than someone who turned 75 in 2021.

These updates are rare and widely publicized when they occur. Most of the time, you use the current published table.

Common mistakes and how to avoid them

Using the wrong valuation date is surprisingly frequent. People sometimes use December 31 of the distribution year itself (the balance on the last day of 2025 for a 2025 RMD) rather than the prior year-end. The IRS is clear: it must be the prior December 31.

Another pitfall is using the wrong age. Your age on December 31 of the distribution year is what matters. If you turn 74 on June 15, 2025, then for your 2025 RMD you use age 74, not 73, because you’ll be 74 on December 31, 2025.

Confusing different life-expectancy tables is also common. Unless you are married and your spouse is your sole beneficiary and is more than 10 years younger than you, use the Uniform Lifetime Table. The Single and Joint tables apply in narrower situations.

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