2022 New IRS Required Minimum Distribution (RMD) Tables

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2022 New IRS Required Minimum Distribution (RMD) Tables

People age 72 and above are required to withdraw a minimum amount from their pre-tax retirement accounts each year. This makes sure taxes aren’t deferred forever. It’s called Required Minimum Distributions (RMD). The required amount is a percentage of the account’s balance as of December 31 of the previous year. The required percentage goes up with age, reflecting the reduced life expectancy.

Back in 2018, President Trump signed an executive order directing the IRS to study the life expectancy tables used to determine RMDs and see whether they should be updated to reflect longevity improvements over the years. They did that and published a new set of RMD tables for years starting on or after January 1, 2022. These new tables will lower RMDs slightly for most ages.

However, maybe because it’s still early, the IRS hasn’t yet updated its Publication 590-B to show the new tables. Meanwhile, people planning to take the required minimum distributions in 2022 need to know how much they must take from their retirement accounts to comply with the new regulations.

The new tables are out there. They’re just not in the IRS publication yet. The IRS published them in the Federal Register in November 2020. The Federal Register is the place for official records of the federal government. It’s like the books in the county recorder’s office where all the land deeds are recorded.

Here are the links in the Federal Register for the three new RMD tables. The Uniform Life Table is the most commonly used table. Use this table when you are:

unmarried; ormarried and your spouse isn’t more than 10 years younger than you; ormarried and your spouse isn’t the sole beneficiary of your account

Use the Joint and Last Survivor Table when your spouse is more than 10 years younger and is the sole beneficiary. Use the Single Life Table when you’re a beneficiary of an inherited retirement account.

Uniform Life Table

I’m reproducing the most commonly used Uniform Life Table here for your convenience.

A factor of 27.4 at age 72 means that out of a $1 million total balance in the pre-tax retirement accounts as of December 31 of the previous year, someone who reaches age 72 in the current year must withdraw a minimum of:

$1,000,000 / 27.4 = $36,496.35

The factor for age 72 in the previous table was 25.6, which means the required minimum distribution would’ve been:

$1,000,000 / 25.6 = $39,062.50

The new table reduces the RMD by $2,556.15, which saves a few hundred dollars in taxes.

AgeDistribution Period7227.47326.57425.57524.67623.77722.97822.07921.18020.28119.48218.58317.78416.88516.08615.28714.48813.78912.99012.29111.59210.89310.1949.5958.9968.4977.8987.3996.81006.41016.01025.61035.21044.91054.61064.31074.11083.91093.71103.51113.41123.31133.11143.01152.91162.81172.71182.51192.3120+2.0Uniform Life Table Effective 1/1/2022One-Time Reset for Inherited Accounts

When you’re taking RMDs from your own accounts, you look up your age each year in the applicable table and use the associated factor to calculate your RMD. It works differently when you’re taking RMDs from an inherited account.

When you take the RMD from an inherited account in the first year, you look up the factor in the Single Life Table by your age. For the second year and beyond, you don’t go back to the table again. You remember the factor used in the previous year and you reduce it by 1.

Now, if you already started taking RMDs from an inherited account and the tables changed, the IRS allows you a one-time reset. You look up the factor in the new Single Life Table by your age in the year when you first started taking RMD from the inherited account. Then you reduce the factor by the number of years since then. This makes as if the new tables were in effect back when you started.

Source: Updated Life Expectancy and Distribution Period Tables Used for Purposes of Determining Minimum Required Distributions, Internal Revenue Service, T.D. 9930

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