We are pleased to announce the availability of our new RMD Tax Present Value Estimator workbook.
To determine the present value of future household spending liabilities, the Actuarial Financial Planner (AFP) workbooks require users to estimate annual recurring essential expenses and the expected rates at which those expenses will increase. These expenses include recurring federal and state income taxes. In our post of August 23, 2026, we discussed estimating the present value of future taxes by separately considering recurring annual taxes and non-recurring taxes, such as those associated with future Required Minimum Distributions (RMDs).
Most retirees understand that traditional IRAs and other pre-tax retirement accounts represent assets that are partially offset by future tax obligations. However, estimating the present value of those future taxes can be challenging because RMDs occur over many years and depend on future account growth, IRS distribution factors, tax rates, and longevity.
Our new workbook is designed to complement the AFP workbooks by helping retirees estimate the present value of future taxes associated with Required Minimum Distributions from pre-tax retirement accounts. Using a limited number of user inputs, the workbook projects annual RMDs, estimates the associated taxes, and calculates the present value of those future tax liabilities over a selected planning period.
The workbook is available in our Spreadsheet section.
Key Inputs
- Current age
- Lifetime Planning Period (LPP)
- RMD start age
- Current pre-tax account balance
- Assumed investment growth rate
- Assumed marginal tax rate
- Discount rate
Workbook Assumptions
The workbook assumes:
- No withdrawals prior to the RMD start age.
- RMDs are taken at the beginning of each year.
- Remaining account balances continue to grow at the assumed investment return rate.
- Future taxes are discounted using the selected discount rate.
Potential Uses
The resulting estimate may be useful for:
- Evaluating the true after-tax value of retirement assets.
- Comparing Roth and pre-tax retirement account strategies.
- Assessing the impact of Roth conversions.
- Incorporating future tax liabilities into personal retirement planning.
- Developing a more complete actuarial view of household retirement resources.
As with all of our calculators, results are highly dependent on the assumptions selected by the user. We encourage users to test multiple scenarios involving different investment returns, tax rates, and planning periods to better understand the range of possible outcomes.
The workbook includes comments and guidance for key input cells and uses the current IRS Uniform Lifetime Table divisors for RMD projections.
Applications
The present value of future RMD taxes calculated by this workbook may be entered in the AFP workbook as a PV Other Expected Non-Recurring Expense. Alternatively, the estimate may be used as a guide when modeling future non-recurring tax liabilities within the AFP framework.
The workbook may also assist users who are evaluating potential Roth conversions. As one measure of whether a Roth conversion may be beneficial, users can compare the estimated current tax cost of the conversion with the present value of future RMD taxes that might otherwise be incurred if those assets remain in a pre-tax account. While this comparison should not be the sole factor in a Roth conversion decision, it can provide useful insight into the long-term tax consequences of alternative strategies.
Important Disclaimer
We are not accountants, financial advisors, or tax professionals. This spreadsheet is provided solely for educational and retirement planning purposes. Users should consult qualified professionals regarding their individual tax, financial, and estate planning circumstances.
