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IRAs are designed to encourage
tax-deferred savings for retirement, but there are rules
limiting the withdrawal and use of Traditional IRA assets.
IRAs cannot be used to permanently shelter dollars from
income tax. IRA holders are required to begin taking distribution
from their Traditional IRAs after reaching age 70 ½.
IRA distributions must start by your required beginning
date, which is defined as April 1 following the year in
which the IRA holder reaches age 70 ½.
In the majority of instances, Required Minimum Distributions (RMDs) are figured using one uniform table, the current minimum distribution incidental benefit (MDIB) table to determine distributions. (An exception to the above applies when a spouse is the sole beneficiary and is more than ten years younger. In this case, the joint life expectancy table is used. )
Required Minimum Distributions (RMD) are calculated based on the Fair Market Value of your Traditional IRA as of December 31 of the previous year and divided by the MDIB factor. The MDIB factor is based on the age you will obtain on December 31st of the current calendar year. Following is a list of ages and the applicable life expectancy divisor, MDIB Table:
|
Age
Divisor
|
Life
Expectancy Divisor
|
Age
Divisor
|
Life
Expectancy Divisor
|
|
70
|
27.4
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86
|
14.1
|
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71
|
26.5
|
87
|
13.4
|
|
72
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25.6
|
88
|
12.7
|
|
73
|
24.7
|
89
|
12.0
|
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74
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23.8
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90
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11.4
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75
|
22.9
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91
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10.8
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76
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22.0
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92
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10.2
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77
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21.2
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93
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9.6
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78
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20.3
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94
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9.1
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79
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19.5
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95
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8.6
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80
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18.7
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96
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8.1
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81
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17.9
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97
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7.6
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82
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17.1
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98
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7.1
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83
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16.3
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99
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6.7
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84
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15.5
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100
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6.3
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85
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14.8
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101
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5.9
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Calculate your required minimum
distribution with our Required Minimum Distribution Worksheet.
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