Minimum IRA Distribution Calculation

The minimum IRA distribution calculation is different for these different circumstances:

  • If you are the IRA owner
  • If you are a non-spouse IRA beneficiary
  • If you are the spouse of the beneficiary and if
    • the deceased had reached age 70 1/2 and had started taking distributions
    • the deceased had reached not yet reached age 70 1/2

Here is the minimum IRA distribution calculation for each case and then we provide a link to specifics.

Minimum IRA Distribution Calculation for IRA Owners

The IRA owner must take the first distribution in the year he reaches age 70 1/2.  The calculation is as follows

  1. Get the prior-year December 31 balances of all of your retirement accounts
  2. Add up all balances from IRA accounts of similar type (for example, you cannot combine a contributory IRA and a SEP IRA and do one calculation based on the total value.  You need to do a calculation and take a separate distribution for each type of retirement plan- — IRA, SEP IRA, 401k, etc).
  3. Open up a copy of IRS publication 590-B and flip to the appendices
  4.  Use the worksheet IRS provides there

To use the worksheet, you will divide the balance from step 2 above by a number that you get from one of three required minimum distribution tables. These tables are also in the appendix of publication 590-B. There is a table for each of these 3 possible situations:

  • IRA owner who is single or has a spouse not more than 10 years younger
  • IRA owner who  has a spouse 10 or more years younger
  • A non-spouse beneficiary of the deceased IRA owner

Minimum IRA Distribution Calculation for Spouses

Why is there no table for spouses?  Because the minimum IRA distribution calculation for the spouse depends on some conditions and choices made by the spouse. Depending on the mix of conditions and choices, the spouse will use the same table as the deceased. We explain this in detail in our post on IRA Distribution Calculation for Spouses.

Minimum IRA Distribution Calculation for Non-Spouse Beneficiaries

If you are a non-spouse beneficiary of an IRA whose owner is deceased, you must take distributions from the IRA every year – even if you are just a year old! The minimum IRA distribution calculation is quite simple:

  1. get the IRA balance from December 31 of the prior year
  2. Use the table labeled “Single Life Expectancy.” Look up your age and find your life expectancy
  3. divide the IRA balance from step 1 by the life expectancy from step 2
  4. repeat this each year by subtracting “1” from the life expectancy in step 3