RMD Calculator (2026) — Avoid the 'Sell Stocks to Pay RMD' Trap
TL;DR: Once you turn 73, the IRS forces you to withdraw a percentage of your IRA each year — whether you need the money or not. If your IRA is invested in stocks during a down year, you're forced to sell low. A deferred annuity with a lifetime income rider (GLWB) inside the IRA pays a level annual income that can satisfy the RMD without selling other holdings.
How this calculator works
The RMD formula is:
RMD = Prior year-end IRA balance / IRS Uniform Lifetime Table factor
Selected 2022+ Uniform Lifetime Table factors:
- Age 73: divisor 26.5 (3.77% of balance)
- Age 75: divisor 24.6 (4.07%)
- Age 80: divisor 20.2 (4.95%)
- Age 85: divisor 16.0 (6.25%)
- Age 90: divisor 12.2 (8.20%)
- Age 95: divisor 8.9 (11.24%)
The annuity-coverage calculation: a deferred annuity inside your IRA with a 6-7% GLWB payout rate generates a level annual income equal to (annuity portion) × (GLWB rate). If that income equals or exceeds the RMD attributable to the annuity portion of the IRA, the GLWB satisfies the RMD without selling other IRA holdings.
What the result means
Your RMD this year is the IRS-mandated minimum withdrawal. Failing to take it triggers a 25% penalty on the shortfall (reduced to 10% if corrected within 2 years). Take it on time.
Annuity GLWB covers is what the rider pays you each year — level for life, regardless of market performance. If your GLWB income equals or exceeds the RMD on the annuity portion, you've eliminated the forced-sell risk on that portion of the IRA.
RMD shortfall is what you'd still need to pull from the rest of the IRA (stocks, bonds, cash). Goal: keep this number small or zero so you're never forced to sell market-volatile holdings in a downturn.
When MYGA wins / when the alternative wins
Annuity with GLWB inside IRA wins when: you're worried about sequence-of-returns risk on RMDs, you want a level "paycheck" satisfying the RMD without timing decisions, and you have 5+ years until or after 73.
Standalone MYGA inside IRA wins when: you want to grow money tax-deferred without an income rider's fees (rider fees of 0.85-1.50%/yr drag account value). You'll satisfy RMDs by free withdrawals at distribution time.
Pure stock/bond IRA wins when: you have other non-IRA cash to live on, can ignore the RMD market timing, and want maximum long-term growth.
QLAC wins when: you want to defer the RMD on up to $200,000 of IRA money until age 85 (Qualified Longevity Annuity Contract carve-out, 2026 limit).
Worked example
Scenario: 75-year-old with $800,000 IRA, of which $300,000 is in a deferred annuity with 6.5% GLWB.
- Prior year-end balance: $800,000
- Age factor at 75: 24.6
- RMD: $32,520
- GLWB income from annuity portion: $300,000 × 6.5% = $19,500/yr
- Shortfall: $32,520 - $19,500 = $13,020 must come from the other $500K (stocks/bonds)
In a market downturn, instead of being forced to sell $32,520 of stocks at depressed prices, she only has to sell $13,020. The GLWB has done the heavy lifting.
If she had $500,000 in the annuity with GLWB instead, that would generate $32,500 — covering the entire RMD. Zero forced sales.
Common mistakes
- Missing the RMD deadline (Dec 31). First-year RMDs can be delayed to April 1 of the following year, but doubling up in one year creates a tax mess. Take year-1 RMD by Dec 31.
- Aggregating RMDs across IRAs but not 401(k)s. You CAN aggregate multiple IRA RMDs (take it all from one account). You CANNOT mix 401(k) RMDs with IRA RMDs.
- Not coordinating with Roth conversions. Doing a Roth conversion in the same year as an RMD bunches income and can push you into IRMAA brackets. Plan years in advance.
- Forgetting QLAC carve-out. You can move up to $200,000 of IRA money into a QLAC (Qualified Longevity Annuity Contract) to push the RMD on that portion to age 85.
- Using rider income when you don't need it. If the GLWB pays $19,500 but your actual RMD is $15,000, you're being forced to take and tax extra income. Right-size the annuity portion.
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FAQ
Q: When do RMDs start?
A: Age 73 if you were born 1951-1959. Age 75 if born 1960 or later (SECURE 2.0 Act).
Q: What's the penalty for missing an RMD?
A: 25% of the shortfall, dropping to 10% if corrected within 2 years via Form 5329. The IRS may waive for reasonable cause.
Q: Does the GLWB income satisfy the full RMD?
A: Only the RMD attributable to the annuity portion. The rest of the IRA still has its own RMD that must be satisfied separately or via aggregation.
Q: Can I aggregate annuity RMDs with other IRAs?
A: Yes — if the annuity is held inside an IRA, its RMD can be combined with other traditional IRA RMDs. But if it's a non-qualified annuity, separate rules apply.
Q: What's a QLAC?
A: Qualified Longevity Annuity Contract — an IRS-blessed way to use up to $200,000 of IRA money to buy a deferred income annuity that starts paying by age 85, with the RMD on that money deferred until payments begin.
Q: Does Roth IRA have RMDs?
A: Roth IRAs have no RMDs during the owner's lifetime (SECURE 2.0 eliminated Roth 401(k) RMDs starting 2024). Inherited Roths have separate distribution rules.
Q: Does the IRS table change every year?
A: The table itself updates rarely (last in 2022). Your divisor changes each year as you age. The 2026 table is the same as the 2022 update.
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Disclosure
This calculator is for educational and illustrative purposes only and is not a personalized recommendation, solicitation, or offer of any specific product. Outputs are approximations using publicly available rates, IRS tables, and standard payout factors as of 2026; actual carrier illustrations may differ. Annuity rates, caps, payout factors, surrender schedules, and tax brackets change frequently. Always confirm current values against the most recent carrier disclosure document, IRS Publication 590-B, and the actual contract before purchasing. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers. Tax discussion reflects federal law as of 2026 and is subject to change. Consult a CPA and licensed advisor before acting on any output shown.