New tables for required distributions

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bsteiner
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New tables for required distributions

Post by bsteiner » Thu Nov 07, 2019 1:12 pm

The IRS has proposed new tables for required distributions from retirement plans and IRAs, effective in 2021: https://s3.amazonaws.com/public-inspect ... -24065.pdf. The new tables reflect the increase in life expectancy since the current tables were issued.

Dottie57
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Re: New tables for required distributions

Post by Dottie57 » Thu Nov 07, 2019 1:32 pm

So it looks like bigger divisors and therefore smaller RMDs.

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corn18
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Re: New tables for required distributions

Post by corn18 » Thu Nov 07, 2019 1:34 pm

This just lists the new life expectancy tables, not the resulting RMD tables. Where are the RMD tables? I guess it's just simple math to get the RMD's. :oops:
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bsteiner
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Re: New tables for required distributions

Post by bsteiner » Thu Nov 07, 2019 1:57 pm

corn18 wrote:
Thu Nov 07, 2019 1:34 pm
This just lists the new life expectancy tables, not the resulting RMD tables. Where are the RMD tables? I guess it's just simple math to get the RMD's. :oops:
As you do now, you would calculate your RMD by dividing your account balance by the appropriate divisor for your age.

There are separate tables for IRA owner, beneficiaries, and IRA owners with spouse beneficiaries more than 10 years younger.

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corn18
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Re: New tables for required distributions

Post by corn18 » Thu Nov 07, 2019 2:36 pm

bsteiner wrote:
Thu Nov 07, 2019 1:57 pm
corn18 wrote:
Thu Nov 07, 2019 1:34 pm
This just lists the new life expectancy tables, not the resulting RMD tables. Where are the RMD tables? I guess it's just simple math to get the RMD's. :oops:
As you do now, you would calculate your RMD by dividing your account balance by the appropriate divisor for your age.

There are separate tables for IRA owner, beneficiaries, and IRA owners with spouse beneficiaries more than 10 years younger.
The face slap was for me, I was being stupid. Thanks for the heads up and link. Helps with planning Roth conversions and taxes.
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HueyLD
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Re: New tables for required distributions

Post by HueyLD » Thu Nov 07, 2019 2:37 pm

bsteiner wrote:
Thu Nov 07, 2019 1:12 pm
The IRS has proposed new tables for required distributions from retirement plans and IRAs, effective in 2021: https://s3.amazonaws.com/public-inspect ... -24065.pdf. The new tables reflect the increase in life expectancy since the current tables were issued.
Have not read all 122 pages, but I hope that the proposed rule will actually take effect in 2021.

I wonder which tables those already on the old RMD tables will be allowed to use. My relatives will be very happy to be required to withdraw less.

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Re: New tables for required distributions

Post by Grt2bOutdoors » Thu Nov 07, 2019 2:50 pm

Only read up to page 22, but the proposed changes aren't substantial enough for an individual to accumulate that much more or pay that much less in taxes on withdrawals. What is a 0.21% decrease in age 70.5 RMD? It's not that significant. The other interesting thing to note is the example that someone aged 70 is only expected to make it to age 90? If that's true, then all those Bogleheads planning to age 100 had better reconsider those restrictive SWR's they've been planning with.
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FIREchief
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Re: New tables for required distributions

Post by FIREchief » Thu Nov 07, 2019 4:17 pm

Thanks for posting this Bruce.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Stinky
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Re: New tables for required distributions

Post by Stinky » Thu Nov 07, 2019 4:27 pm

bsteiner wrote:
Thu Nov 07, 2019 1:12 pm
The IRS has proposed new tables for required distributions from retirement plans and IRAs, effective in 2021: https://s3.amazonaws.com/public-inspect ... -24065.pdf. The new tables reflect the increase in life expectancy since the current tables were issued.
Thanks for posting this Bruce.

Does anyone know when the last time was that these tables were updated? I believe that the age 70 divisor has been 27.4 for as long as I've been paying attention to these tables, but I haven't thought too much about it until recently. Does our government update the tables ever year? Every five years? Or is there any regular pattern to it?
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HueyLD
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Re: New tables for required distributions

Post by HueyLD » Thu Nov 07, 2019 4:31 pm

April 2002.

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Stinky
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Re: New tables for required distributions

Post by Stinky » Thu Nov 07, 2019 5:04 pm

HueyLD wrote:
Thu Nov 07, 2019 4:31 pm
April 2002.
Thanks.

19 years between updates! So I can reasonably expect that the new tables will be in place for my remaining lifetime (presuming that they're approved).

I can now "hard code" the new factors into my retirement income spreadsheet. :D
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delamer
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Re: New tables for required distributions

Post by delamer » Thu Nov 07, 2019 5:14 pm

Remember that this a proposal posted in the Federal Register; the IRS is seeking public comments on changing the tables.

While I imagine it is highly likely that the tables will be adopted, they should be considered preliminary for planning purposes.

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Re: New tables for required distributions

Post by Misenplace » Thu Nov 07, 2019 5:23 pm

As delamer has pointed out, this is a Notice of Proposed Rulemaking by the IRS, that has been published for public comment. As such, it falls within to the exceptions of the generally 'no politics' forum policy. See the Forum Policies rules#rule-4a
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