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Treasury Proposes Changes to Required Minimum Distributions of IRAs

New RMDs will take into account mortality tables reflecting longer life expectancies.

The Treasury has issued proposed regulations to update tables used to determine required minimum distributions (RMDs), incorporating current mortality tables reflecting longer life expectancies. The proposed regs would extend the number of years for making distributions from qualified retirement plans, IRAs and annuities, and certain other tax-favored employer-provided retirement arrangements. The result: lower RMDs for all ages and greater deferral of income taxes, thereby assuring a more secure retirement.

For example, the present table that applies to single individuals extends to age 111. The proposed replacement table extends to age 120. On adoption as a final regulation, RMDs will decrease for all plan participants and surviving spouses whose applicable distribution periods are redetermined each year.


The proposed regs include specific examples. In one, a 70-year-old IRA owner who uses the Uniform Lifetime Table to calculate RMDs must use a life expectancy of 27.4 years under the existing regulations. The proposed regs would require use of a life expectancy of 29.1 years.

That can produce a significant RMD reduction. Assuming, for example an account value of $250,000, the RMD would be $8,591 instead of $9,124—a reduction of $533, or about 6%.

As another example, a 75-year-old surviving spouse using the Single Life Table to compute RMDs must use a life expectancy of 13.4 years. Under the proposed regs, the spouse would use a life expectancy of 14.8 years.

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