Mandatory 401(k) withdrawals at age 70 1/2, known as required minimum distributions, are calculated by dividing the balance in the 401(k) account on December 31 of the previous year by the life expectancy of the account holder, reports Bankrate. Life expectancy is determined using the appropriate IRS uniform lifetime table.
401(k) account holders can withdraw more than the minimum distribution at any time after age 59 1/2, but required minimum distributions must begin at age 70 1/2, or account holders are subject to a 50 percent penalty tax on the amount that should have been distributed, according to the IRS. Account holders may withdraw larger amounts than the minimum, but the excess does not count towards the following year's required minimum distribution. Although 401(k) administrators may help calculate the required minimum distribution, responsibility for calculating and withdrawing the correct amount lies with the 401(k) account holder.
There are three uniform lifetime tables, as reported by the IRS. The standard uniform lifetime table is used by a 401(k) owner whose wife is not more than 10 years younger. The Joint and Last Survivor table is used by an account holder whose only beneficiary is his wife who is more than 10 years younger. The Single Life Expectancy table is used by other beneficiaries of a 401(k) account.