- Calculation notes
- **2023_RMD_CALCULATION_NOTE**s
- Year of RMD
- The year that the RMD is being calculated for. This is usually the current year, but past and future year RMDs can be calculated by changing this value.
- Owner name
- Please enter the account owner's name.
- Owner birthdate
- Please enter the account owner's birthdate.
- Name of account
- Please enter the name of the account for this analysis.
- Amount subject to RMD
- This is the fair market value of the account as of the close of business on December 31st of the preceding year. For example, to determine the RMD for 2017, use the account balance as of 12/31/2016. For traditional IRAs, no adjustments are made for contributions or distributions after that date. If you made a transfer or rollover from one account on or before December 31st of the preceding year and the funds were received by a new account in the next year, you will need to increase your December 31st fair market value by the amount that was transferred or rolled over and not included in the December 31st value of either account.
- Plan type
- Please enter the plan type. If you choose a ROTH plan type, there are no RMD's required. All other plan types are used for descriptive purposes only and do not impact any calculations.
- Hypothetical Interest rate
- This is the expected rate of return on your account. This is only used to help project your future account balances (which of course will impact your required minimum distribution). The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2021, had an annual compounded rate of return of 13.6%, including reinvestment of dividends. From January 1, 1970 to December 31st 2021, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 11.3% (source: www.spglobal.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
- Is sole beneficiary a spouse?
- Check this box if your only beneficiary is your spouse. The new IRS rules use a uniform table to calculate all life expectancies for determining a minimum distribution. The only exception to this rule is if the only beneficiary is a spouse and he or she is more than 10 years younger than the account owner. In this situation, the joint life expectancy table is used. The Joint Life expectancy table normally produces lower required distributions.
- Spouse's birthdate
- If the sole beneficiary of your account is a spouse, enter the beneficiary's birthdate. If the spouse is more than 10 years younger than the account owner, the Joint Life Expectancy table is used which can lower your RMD.
