The recent passage of the SECURE Act 2.0 includes some immediate changes to the calculations of many calculators. The foremost change was to the Required Minimum Distribution (RMD) calculation for account owners. The table below shows the new RMD Ages now used by all RMD calculators. A new calculator has been added to specifically calculate when the first RMD is required. It can be found here: Required Minimum Distribution (RMD) - Year To Begin.
Secure 2.0 did not change how the RMD is calculated; it only changed the age that they start. These rules took effect January 1st, 2023.
|Account owners born on or before 6/30/1949||70 1/2*|
|7/1/1949 through 12/31/2050||72*|
|1/1/1951 through 12/31/1960||73*|
|Account owners born on or after 1/1/1961||75*|
|*Age of account owner as of 12/31 of the distribution year. This RMD chart only applies to the original account owner or a spouse who chooses to treat their inherited account as their own.|
|Required Minimum Distribution (RMD)||Use this calculator to determine your Required Minimum Distributions (RMD) as an account owner of a retirement account. This financial calculator will also look at potential future year's distribution requirements.|
|Required Minimum Distribution (RMD) - Current Year||Use this calculator to determine your Required Minimum Distributions (RMD) as an account owner of a retirement account for the current year.|
|Required Minimum Distribution (RMD) - Future Projection||Use this calculator to create a projection of your future Required Minimum Distributions (RMD) as an owner of a qualified retirement account.|
|Required Minimum Distribution (RMD) - with Stretch Projection||Use this calculator to create a stretch projection for Required Minimum Distributions (RMD) of a qualified retirement account.|
|Required Minimum Distribution (RMD) - Year To Begin||Use this calculator to determine calculate when your Required Minimum Distributions (RMD) must begin to avoid penalties. If distributions are required to have been started, it will also calculate the current year RMD.|
|RMD & Stretch IRA Calculator||Use this calculator for a spouse beneficiary (assumes spouse rolls to own IRA) or owner's death was post 2019 and the beneficiary is a Designated Beneficiary.|
The current calculators have an updated definition for changes that take place starting in 2025 for additional catch-up contributions for people ages 60 to 63. Below is the new definition that appears when the contribution limit appears in a calculator. Calculation changes, which impact retirement savings plans contribution amount, will be implemented as the changes go into effect. As the new rules are further clarified, it is expected that the 3/31/2023 update will included additional changes..
This is the percentage of your annual salary you contribute to your 401(k) plan each year. Your annual 401(k) contribution is subject to maximum limits established by the IRS. The annual maximum for 2023 is $22,500. If you are age 50 or over, a 'catch-up' provision allows you to contribute an additional $7,500 into your account. The SECURE 2.0 Act of 2022 adds an additional catch-up provision starting in 2025. The current calculator does not include this new catch-up contribution. The new special catch-up contribution, when you are age 60 to 63, allows an additional contribution of $10,000 or %150 of the standard catch-up contribution limit from 2024 (whichever is higher). The $10,000 maximum is adjusted for inflation starting in 2026. Employer contributions do not count toward the IRS annual contribution limit.
Employees classified as "Highly Compensated" may be subject to additional limits based on their employer's overall 401(k) participation. If you expect your salary to be $150,000 or more in 2023 or was $135,000 or more in 2022, you may need to contact your employer to see if these additional contribution limits apply to you.
The calculators use the existing Annuity 2003 Mortality Tables through 2021. For 2022 and later, all calculators have been updated to automatically use the new Life Expectancy and Distribution tables. The new tables, which were finalized by the IRS in November of 2020, replace the older annuity factors and life expectancies as of January 1, 2022.
Allowing the beneficiary of a retirement account to stretch out distributions over their life time has been significantly impacted by the SECURE Act of 2019. Previously, all beneficiaries had this option. With the new law only designated eligible beneficiaries are allowed this type of minimum distribution. If you are not a designated eligible beneficiary, you have until 12/31 of the year that contains the 10th anniversary of the original account owner's death to withdraw all funds from the account. There are no minimum withdrawals during this 10 year period, but all funds must be withdrawn before the deadline to avoid significant penalties. Designated eligible beneficiaries are a surviving spouse, a child of the account owner (but generally only until they are 18, at that point the 10 year rule begins) or a chronically ill individual. For more information please see Modification of Required Distribution Rules for Designated Beneficiaries.
The RMD waiver is for retirement plans and accounts for 2020. This includes direct contribution plans such as 401k, 403b, 457b plans and IRAs. RMDs are also waived for IRA owners who turned 70 1/2 in 2019 and were required to take an RMD by April 1, 2020 and have not yet done so. For more information please see Waiver of Required Minimum Distribution for 2020.
Where the original account owner died prior to 2020 and prior to their required RMD begin date, the five year distribution period has been extended to six. For more information please see Waiver of Required Minimum Distribution for 2020.
IMPORTANT! The calculators have updated for SECURE 2.0 (2022), SECURE Act of 2019 and the CARES Act of 2020. However, while the new laws are effective as of January 1st, 2020 and March 27th, 2020, and January 1, 2023 respectively; the IRS has not released procedures for all of its implementation. Future IRS published procedures may have an impact on enforcement and interpretation of these Acts. Future IRS published procedures may have an impact on enforcement and interpretation of these Acts.