Beneficiary RMD - Future Projection
These calculators only apply to the first generation beneficiary not a second generation beneficiary. In the event of the first beneficiaries death, the second beneficiary should contact their own tax advisor for information on the appropriate RMD calculation.
Beneficiary RMD - Future Projection Definitions
- Calculation notes
- This calculator follows the latest IRS rules and life expectancy tables which were finalized on April 16th, 2002. These new IRS regulations were optional in 2002 but became mandatory as of January 1st, 2003. If you have questions, please consult with your own tax advisor regarding your specific situation.
- Life expectancy calculations
- Life expectancy is usually determined using the Single Life Expectancy table and the beneficiary's age on 12/31 of the year following the owner's death. However, if this is not the first year of distribution for the beneficiary, there is an additional step. First, we find the original life expectancy using the Single Life Expectancy table and the beneficiary's age on 12/31 of the year following the owner's death. Then, the current life expectancy is calculated by subtracting one for each year that has passed, from the original life expectancy. Likewise, in all future years, the remaining life expectancy is calculated by subtracting one for each additional year that has passed. It is not allowed to lookup or 'recalculate' a new starting life expectancy after distributions have begun.
If the account owner was younger than the beneficiary, and it was past the required begin date for distributions when the account owner died, the beneficiary can choose to use the account owner's life expectancy to calculate Required Minimum Distributions (RMD). In this special case, the result will always produce a lower RMD. If this situation occurs, this calculator will use the account owner's age when calculating RMDs. Other than using the account owner's age at death, the calculation is identical to the one stated above.
- Beneficiary's name
- Please enter the account beneficiary's name.
- Name of account
- Please enter the name of the account for this analysis.
- Beneficiary's birthdate
- Please enter the account beneficiary's birthdate.
- 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 2017, had an annual compounded rate of return of 8.3%, including reinvestment of dividends. From January 1, 1970 to December 31st 2017, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.6% (source: www.standardandpoors.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.
- Amount Subject to RMD
- This is the fair market value of your account. For RMD calculations, the amount to use is the balance balance on 12/31 of the previous year. For example, to determine the RMD for 2017 the account balance on 12/31/2016 would be used.
- Date of the original account owner's death
- Please enter the date of the original account owner's death.
- Plan type
- Please enter the plan type. The plan type is can affect distributions if the account owner is younger than the beneficiary and RMDs have already begun.
- Original account owner's birth date
- Please enter the original account owner's birth date.