You use a the IRS 401(k) withdrawal calculator by entering the balance that is in your 401(k), your age and the age of your beneficiary, according to Bankrate. You also need to enter other information to determine the amount of the required minimum distribution for the year. Once you reach the age of 70 1/2, distributions are mandatory, explains the IRS.
Continue ReadingYou can delay your first mandatory distribution from your 401(k) account without penalty to April 1 of the following year. You must make withdrawals from your 401(k) by December 31 of each subsequent year, explains Bankrate.
To determine the amount to withdraw, you enter the amount in your 401(k) account on December 31 of the previous year and your age on December 31 of the year you're calculating your distribution. You need to check the box if your birthday is after June 30, because this impacts whether you need to begin your mandatory distributions at the age of 70 or 71, explains Bankrate. Check the box if your spouse is the named sole beneficiary, and indicate the age of your spouse to determine which IRS uniform table should be used to make your calculations.
While the 401(k) plan administrator can help you with the distribution calculations, it's your responsibility to calculate and take those distributions. The penalty for not taking distributions is a 50 percent tax on the amount of distribution you were required to take, reports Bankrate.
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