IRS Issues New RMD Life Expectancy Tables

The Internal Revenue Service recently issued new RMD (required minimum distribution) life expectancy tables to be used by account owners and beneficiaries to calculate RMDs from traditional IRAs and other retirement accounts. The new tables are effective for RMDs taken after 2021.

Those who take only the minimum amount required by the IRS each year will see smaller RMDs each year and greater opportunity for tax deferred growth.

There are 3 life expectancy tables used to calculate RMDs:

Uniform Lifetime Table. This table is used in most cases by an owner of a traditional IRA or other tax deferred retirement account. It does not matter whether the account owner is single or married. (Owners of Roth IRAs are not subject to minimum distribution rules.)

Joint & Last Survivor Table. This table is used primarily by an owner of a traditional IRA or other taxable retirement account if the owner’s spouse is the sole account beneficiary and is more than 10 years younger than the account owner.

Single Life Table. This table is used by the beneficiary of an inherited retirement account (traditional or Roth) if: a) the account owner died before January 1, 2020; or b) the account owner died after December 31, 2019, and the beneficiary is an eligible designated beneficiary (EDB). An EDB is a surviving spouse, a minor child, a disabled or chronically ill individual, or an individual not more than 10 years younger than the deceased account owner. An individual who does not qualify as an EDB must liquidate the entire balance of an inherited account within 10 years of the year of the account owner’s death.

Remember, the new tables must be used to calculate annual RMDs taken after calendar year 2021. Roth IRA owners are not subject to RMD rules, but Roth IRA beneficiaries are. Regardless of the type of account, RMDs are not required for 2020.

You may read the IRS publication here.

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