Starting in 2022, the various tables used to calculate required minimum distributions (RMDs) from retirement plans will be updated. To reflect longer life expectancies, these tables will be expanded to allow RMDs to be drawn out over a greater length of time.

The benefit here is twofold: One, more drawn out RMDs means retirees can rest assured knowing that even if they live significantly longer than the average life expectancy, smaller withdrawals allow more of your money to sit in those accounts and potentially grow. And two, it means the amount of money you’re required to take from each distribution shrinks, potentially lessening your tax burden.

Essentially, this allows you more of an opportunity to grow the money in your accounts and have it for longer.

Updated Life-Expectancy Table

The new Uniform Lifetime Table was supposed to go live in 2021, but the IRS pushed the effective date back to January 1, 2022. The table below reflects the updates based on longer life-expectancy:

Age

Distribution Period (Years)

72

27.4

73

26.5

74

25.5

75

24.6

76

23.7

77

22.9

78

22.0

79

21.1

80

20.2

81

19.4

82

18.5

83

17.7

84

16.8

85

16.0

86

15.2

87

14.4

88

13.7

89

12.9

90

12.2

91

11.5

92

10.8

93

10.1

94

9.5

95

8.9

96

8.4

97

7.8

98

7.3

99

6.8

100

6.4

101

6.0

102

5.6

103

5.2

104

4.9

105

4.6

106

4.3

107

4.1

108

3.9

109

3.7

110

3.5

111

3.4

112

3.3

113

3.1

114

3.0

115

2.9

116

2.8

117

2.7

118

2.5

119

2.3

120

2.0

The new regulation also provides updates to the following tables:

  • Single life table
  • Joint and last survivor life table
  • Mortality rates table

While the update to these life-expectancy tables doesn’t take effect until 2022, the year leading up to its implementation will still be crucial from a planning standpoint. Take some time to speak with your financial advisor to prepare for the changes ahead.

Brian Vnak

Brian Vnak

Senior Vice President, Advisor Services

CFP®, CPA, Series 7 Securities Registration,1Series 66 Advisory Registration,† Insurance License Brian diligently advises clients on income, gift, trust and estate tax issues while leveraging the expertise of the Roundtable to deliver comprehensive, customized strategies. For more than 10 years he has helped numerous clients develop and implement sophisticated financial, tax and estate strategies that are in alignment with their goals and values. Brian is a...Read More