Key Points
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Your RMD depends on your account balance, as well as your age.
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There’s a straightforward way to calculate your RMD for 2025.
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The important thing is to use the correct IRS life expectancy table.
After you reach 73 years of age, you’re required to start withdrawing money from certain retirement accounts. Specifically, if you have money in tax-deferred accounts, including but not limited to a traditional IRA, 401(k), 403(b), or thrift savings account, the required minimum distribution (RMD) rules apply to you. (Any funds in after-tax (Roth) accounts aren’t subject to RMDs.)
What is your RMD if you have $1 million?
If you have $1 million in retirement savings in tax-deferred accounts, how much are you required to withdraw in 2025?
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There are two factors that matter in the calculation of your RMD. The first is your account balance at the end of the previous year. For the purposes of this example, we’ll assume that you had $1 million on Dec. 31, 2024, but you can find your exact year-end balance on your account statement.
The other key factor is the age you’re turning this year. RMDs are based on your life expectancy. In other words, the older you get, the fewer years you’re expected to live, and the percentage of your account that you’re required to withdraw increases.
For the purposes of calculating your RMD, there are two IRS life expectancy tables that you could use:
- Uniform Lifetime Table: This applies to the majority of retirees.
- Joint Life Expectancy Table: Used only in cases where your sole beneficiary is your spouse and they’re more than 10 years younger than you.
Example of calculating your RMD
Let’s say that you’re turning 75 years old in 2025 and ended last year with $1 million in a retirement account. For simplicity, let’s say that you can use the uniform lifetime table, which gives you a life expectancy factor of 24.6.
To calculate your RMD, simply divide the account balance by the life expectancy factor. Therefore, $1 million divided by 24.6 is $40,650, so this is the amount you’re required to withdraw from your account.
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