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125 S. 4th Street

Norfolk, NE 68701

 

Phone:     402-371-1160

Toll Free: 800-694-1160

 

Website: www.mcmill.info

January 2022

New RMD Tables for 2022

Insights and Tips

The IRS released new life expectancy tables to be used for calculating required minimum distributions (RMDs) from IRAs and qualified plans like 401(k)s. The new tables, which were last updated in 2002, reflect longer life expectancies and allow account holders to spread RMDs over a longer period, potentially lessening annual tax burdens and easing account depletion concerns. The new tables go into effect on January 1, 2022.


Let's look at an example that demonstrates the difference in withdrawal amounts. In 2022, a 72-year-old IRA owner will use a 27.4-year life expectancy compared to 25.6 years under the old tables. If the IRA balance on January 1, 2022 is $1 million, the required minimum distribution will be approximately $36,500, compared to $39,100 in 2021.


Keep in mind that non-eligible designated beneficiaries are still subject to the 10-year rule that requires all funds to be withdrawn by the end of the tenth year following the account holder's death.


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