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assets and opportunity invest in your future how rmds are calculated required minimum distributions or rmds are essential for individuals with retirement accounts understanding how they are calculated is crucial for Effective retirement planning rmds apply to various retirement accounts including traditional IRAs and 401ks the IRS mandates that account holders begin withdrawing funds at a specific specific age currently set at 73 for those born after 1959 to calculate rmds one must first determine the account balance as of December 31st of the previous year this balance forms the basis for the distribution amount next the IRS provides a uniform Lifetime Table which outlines a distribution period based on the account holders age this table helps determine the life expectancy factor used in the calculation the rmd is calculated by dividing the account balance by the life expectancy factor from the table this formula ensures a systematic withdrawal over the account holderamp;#39;s lifeti