How to Calculate IRA Distributions

Individual Retirement Agreements (IRAs) require that distributions not start until the owner is at least age 59 1/2 to not be penalized. Once the owner is of age to take non-penalized distributions, the money taken out of the account is added to income, possibly increasing his tax bracket. This is why many people opt to take as little out from their IRA as possible.

Things You'll Need

• IRA Statement (Year-End of Previous Year)
• Joint-life Expectancy Table
• Calculator

Instructions

How to Calculate IRA Distributions

1. Look at the balance of the IRA at the end of the year, prior to the distribution being calculated.

2. Key the balance into the calculator and press the divide key.

3. Locate your age on the joint life-expectancy table and find the number that will be the divisor. Essentially, this is how many more years you are expected to live.

4. Key in the divisor into the calculator and press the equal key.

5. Note the amount to be taken out prior to the year end of the current year. This can be taken out monthly, quarterly or annually.

Tips & Warnings

• Distributions must be taken by the end of the calendar year. If a person has not taken distributions from their IRA by age 70 1/2, she will be required to take a minimum distribution from that age on.

Resources

• Joint Life Expectancy Table