You can calculate the amount of your minimum required distribution (MRD) by dividing your account balance at the end of your plan’s fiscal year—usually but not always December 31—by the distribution period assigned to someone your age. You find the number that corresponds to your age in the uniform lifetime table provided in Appendix C of IRS Publication 590.
For example, if your account value is $500,000 and you begin withdrawals for the year you turn 70, you divide the $500,000 by 27.4. Your MRD is $18,248. The next year, you divide by 26.5. If the account had grown back to $500,000, as it would by earning a return of less than 4%, your MRD would be $18,868.
If you’ve left your money in your 401(k) or rolled it over to an individual retirement account (IRA), the plan administrator, the company that handles plan distributions, or the IRA custodian will actually calculate the MRD amount for you. In some cases, it will be paid to you on a schedule you choose.
New withdrawal rules finalized in 2002 increased the distribution period, thus reducing required withdrawals for everyone participating in a 401(k) or IRA. If you’re married to someone more than 10 years younger than you are, you can use an even longer period, reducing the required withdrawal even further.
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