The Hump

This website was created to make suggestions on how the government might fix the problems with the current Social Security system, but we all know what chance we have of the government doing something logical that might be good for the country. Re-election is their primary goal. So, since we have to live with the current system, for a while at least, these pages were created to help us avoid one of the biggest problem that some of us will face, retirees paying the highest taxation levels of any American citizen, something we call The Hump.

IRA required minimum distributions table

Tax law requires individual retirement account holders to begin taking out at least minimum amounts, known as required minimum distributions, or RMDs, from their accounts once they reach age 70½. Technically, that means the IRA money must start coming out in specific increments no later than April 1 following the year you reach that age.

The exact distribution amount changes from year to year. It is calculated by dividing an account's year-end value by the distribution period determined by the Internal Revenue Service.

Several years ago, the IRS revised distribution rules and the various life expectancy tables used to make the RMD calculations. The reformulation means that taxpayers now have to take out less. This is welcome news to retirees who have enough income from other sources and who want to withdraw as little as possible from their IRAs, letting the accounts grow in value for longer.

The table shown below is the Uniform Lifetime Table, the most commonly used of three life-expectancy charts that help retirement account holders figure mandatory distributions. We have extended this table back to age 62 to help you plan your distributions during the early retirement period.

To calculate the year's minimum distribution amount, take the age of the retiree and find the corresponding distribution period. Then divide the value of the IRA by the distribution period to find the required minimum distribution.