RMD & Stretch IRA Calculator

Calculation Notes

**2024_RMD_CALCULATION_NOTE**

Stretch Calculation Notes

The strategy assumes that you will take the smallest amount of money from the IRA that the law allows, and at the latest time it allows, without penalty. This is accomplished by the following rules below:

If you have your spouse as the beneficiary of the account:

1. The IRA owner names his/her spouse as sole primary beneficiary of the IRA. While alive, the IRA owner begins taking RMD payments at their required age, using a factor from the IRS Lifetime Tables to calculate the distribution.
2. Upon the death of the IRA owner, the surviving spouse rolls over the funds to his/her own IRA. Any RMD amount that was not taken for the year of death from the deceased spouse's IRA cannot be rolled over. The surviving spouse names a new IRA beneficiary, such as a child, and begins taking RMD at their required age based on the Uniform Lifetime Table.
3. Upon the surviving spouse's death, beneficiaries will have 10 years beginning with the year after the spouse's death to withdraw all funds. There minimum distributions are only required if the spouse had already started RMDs, however, for our illustration we assume distributions happen evenly over the 10 years. We also assume that the beneficiaries are not considered "Eligible Designated Beneficiaries" which may be able to further stretch out the time-frame of distributions.

If your beneficiary is not a spouse:

1. The IRA owner names a beneficiary or beneficiaries of the IRA. While alive, the IRA owner begins taking RMD payments at their required age using the Uniform Distribution Table to calculate the distribution.
2. Upon the death of the IRA owner, beneficiaries will have 10 years beginning with the year after the original account owner's death to withdraw all funds. There minimum distributions are only required if the account owner had already started RMDs, however, for our illustration we assume distributions happen evenly over the 10 years. We also assume that the beneficiaries are not considered "Eligible Designated Beneficiaries" which may be able to further stretch out the time-frame of distributions.

The Stretch IRA Strategy is only for those who do not need their entire IRA to cover their living expenses. The figures created with this calculator are hypothetical and based on current and variable assumptions you selected to help illustrate a concept. Many factors could impact this hypothetical concept, such as possible changes to tax laws in the future, the impact of inflation and other risks. You should consider the effect of inflation on the assets included inside of the IRA, as inflation will erode purchasing power over time. You should remember that assets included inside of the IRA are subject to market risk, including the possible loss of principal. You should consider the fact that tax laws and IRS rules may change over time, potentially limiting the effectiveness of the Stretch IRA strategy.

Owner's birthdate

The account owner's birthdate. The tool uses this to calculate the account owner's age as well as when minimum distributions are required to take place.

Owner's assumed age at death

This is the age at which you believe the owner of the account will die. Since the IRS uses the age of the account owner as of December 31^st of any given year, this is actually the age of the account owner as of December 31^st of the year they died.

Previous year end value

This is the fair market value of your account as of the close of business on December 31^st of the prior year. For 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 31^st of the prior year and the funds were received by a new account in the next year, you will need to increase your December 31^st fair market value by the amount that was transferred or rolled over and not included in the December 31 value of either account. This amount may also include the actuarial present value of any additional benefits not reflected in your year-end balance.

Hypothetical rate of return

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). La tasa de rendimiento real depende en gran medida de los tipos de inversiones que elija. El índice Standard & Poor's 500® (S&P 500®) durante los últimos 10 años que finalizaron el 31 de diciembre de 2025, tuvo una tasa de rendimiento compuesta anual de 14.8 %, con la reinversión de dividendos. Desde el 1 de enero de 1970 hasta el 31 de diciembre de 2025, la tasa de rendimiento compuesta anual promedio del S&P 500®, con la reinversión de dividendos, fue aproximadamente del 11.3 % (fuente: www.spglobal.com). Desde 1970, el rendimiento más alto a 12 meses fue del 61 % (desde junio de 1982 hasta junio de 1983). El rendimiento más bajo a 12 meses fue del -43 % (desde marzo de 2008 hasta marzo de 2009). Las cuentas de ahorro en una institución financiera pagan menos, pero conllevan un riesgo significativamente menor de pérdida de saldos de capital.

Es fundamental tener en cuenta que estos escenarios son meramente hipotéticos y que las tasas de rendimiento futuras no pueden preverse con certeza. Además, las inversiones que ofrecen tasas de rendimiento más altas suelen estar expuestas a un mayor riesgo y volatilidad. La tasa real de rendimiento de las inversiones puede variar significativamente con el tiempo, en especial en las inversiones a largo plazo. También puede implicar la posible pérdida de capital invertido. No es posible invertir directamente en un índice y la tasa de rendimiento compuesta mencionada anteriormente no incluye los cargos por ventas ni otras tarifas que imponen los fondos de inversión o las empresas de inversión.

Plan type

Please enter the plan type. It is a factor in determining if an RMD is required for the original account owner. If you choose a ROTH IRA plan type, no RMD has ever been required. All other ROTH plan types follow the normal RMD rules through 2023. ROTH plans of all types have eliminated RMDs for years 2024 and later. Other plan types are used for descriptive purposes only and do not impact any calculations.

Beneficiary birthdate

This is the birthdate of the account owner's beneficiary.

Is sole beneficiary a spouse?

Check this box if your only beneficiary is your spouse. The new IRS rules use the Uniform Lifetime 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. The tool also uses this entry to determine whether to calculate for a spouse's beneficiary's life expectancy.

Beneficary's assumed age at death

This is the age at which you believe the original beneficiary of the account will die. Like the account owner's age at death, this is actually the age of the beneficiary as of December 31^st of the year they died.

Spouse's beneficiary's birthdate

If the first beneficiary is a spouse of the original account owner this tool will include a spouse's beneficiary. The tool assumes that the spouse's beneficiary is not a new spouse and isn't a designated eligible beneficiary and will be using the 10-year distribution rule.