This Creative Planning RMD calculator estimates mandatory annual retirement distributions based on year-end balances and life expectancy factors.
Enter your prior-year December 31 balance, your age, and an assumed return to view an illustrative ten-year projection rather than a guaranteed forecast.
At age 73 the withdrawals start
The Internal Revenue Service calculates your required distribution using your account balance from December 31 of the previous year divided by an age-based divisor from the Uniform Lifetime Table. As you grow older, the divisor shrinks, forcing a higher percentage out of your traditional IRA or 401(k) each year. Whatever remains continues to experience market growth or losses throughout the calendar year.
Consider an illustrative $600,000 portfolio at age 75 with an assumed 4% annual return. In the first year, dividing $600,000 by 24.6 produces a mandatory distribution of $24,390, leaving $598,634 after year-end growth. By age 84, the annual distribution climbs to $32,681 even though the remaining principal softens to $537,009.
| Age | IRS divisor | Required withdrawal | Year-end balance |
|---|---|---|---|
| 75 | 24.6 | $24,390 | $598,634 |
| 76 | 23.7 | $25,259 | $596,310 |
| 77 | 22.9 | $26,040 | $593,081 |
| 78 | 22 | $26,958 | $588,768 |
| 79 | 21.1 | $27,904 | $583,299 |
| 80 | 20.2 | $28,876 | $576,600 |
| 81 | 19.4 | $29,722 | $568,753 |
| 82 | 18.5 | $30,743 | $559,530 |
| 83 | 17.7 | $31,612 | $549,035 |
| 84 | 16.8 | $32,681 | $537,009 |
Does my required distribution cover monthly spending?
Comparing your required distribution against your actual living expenses determines whether mandatory withdrawals solve your monthly cash needs or generate unnecessary taxable income. If your distribution equals or falls below your baseline household spending, the process is straightforward because you simply transfer the net proceeds to your primary checking account.
A practical decision rule applies: if your mandated withdrawal exceeds your annual living needs by more than 15%, do not leave the surplus in cash. Reinvest the excess after taxes into a taxable brokerage account to keep your capital working.
What online distribution tools leave out
A standard web tool assumes a straight-line annual return and ignores how mandatory withdrawals trigger Medicare premium surcharges or shift tax brackets. In reality, market downturns can force you to sell equities at depressed prices if your distribution strategy relies on a single rigid asset pool. No investment is guaranteed, and a portfolio can fall in value, sometimes for years.
At Creative Planning, advisors build flexible spending frameworks with defined guardrails instead of rigid percentage schedules. If equity markets decline sharply, guardrails prompt us to trim discretionary monthly withdrawals and pull required funds from cash reserves. When investments recover, distribution rates adjust upward to restore spending capacity.
Using an outdated balance distorts the calculation
The single most disruptive user error is entering an account balance from the middle of the current year instead of December 31 of the previous year. The IRS mandates that prior-year closing values govern the distribution, meaning mid-year checks will overstate or understate your legal liability.
Clients should verify their December custodian statements directly before finalizing distributions. Underestimating the amount risks an excise tax on the shortfall, while overdrawing needlessly accelerates your ordinary income tax bill for the current tax year.
Questions people ask Creative Planning
Can I take more than the amount calculated by the tool?
Yes, you can withdraw more than the required distribution at any point during the year. The IRS establishes a minimum withdrawal amount, not a maximum ceiling. Any sum taken beyond the required minimum is treated as ordinary taxable income and cannot be credited toward required distributions in future tax years.
Do Roth IRAs require minimum distributions during my lifetime?
Original owners of Roth IRAs do not have required distributions at any age. The IRS exempts these accounts because contributions were made with after-tax money. You can allow a Roth IRA to grow untouched for your entire lifetime, though inherited Roth IRAs generally follow separate distribution requirements.
What happens if I miss the annual distribution cutoff?
Failing to withdraw the full mandatory amount before December 31 triggers an IRS excise tax on the undistributed balance. The standard penalty is 25% of the shortfall, though it can drop to 10% if corrected within two years. You must submit IRS Form 5329 to report and correct the oversight.
Can Creative Planning calculate my exact distribution across multiple accounts?
Creative Planning calculates your collective mandatory distributions and confirms which specific accounts should fund them. While traditional IRAs permit aggregated distributions from one account, employer plans like a 401(k) require separate withdrawals from each plan. Advisors review your written plan to coordinate these distributions tax-efficiently.
Planning tools
This material is for general information. It is not individualized investment, tax or legal guidance. Investing involves risk, including the possible loss of principal. Before making any financial decision, talk with a qualified professional about your specific circumstances.