Required Minimum Distributions (RMD)s Explained

Uniform Distribution Table


Source: IRS, Publication 590-B Appendix B, Table III (2017)




1.For calculation purposes, the new IRS Uniform Distribution Table assumes a life expectancy based on the owner’s age and an assumed beneficiary who is 10 years younger. It usually doesn’t matter if there is a beneficiary on the account or how old the beneficiary actually is. (The only time a different table would be used is when the owner is more than 10 years older than the spouse beneficiary.)


2.The complex calculation formulas for the RMD – recalculation, nonrecalculation, or hybrid – are gone. All that is required to calculate the RMD is to divide the year-end value of the retirement account by the factor from the table.


RMD Key Benefits


1.The use of a uniform table means that owners may change beneficiaries after their required beginning date without changing the amount of the RMD. Previously, a beneficiary change could increase the amount of the RMD.


2.The new rule may lower the RMD, thus lowering the tax obligation on that distribution.

* Distributions are subject to a 50% excise tax penalty if RMD is not taken after 70 ½


* As with any financial matter, please consult with your qualified financial professional before taking any action.


* Neither Southwest Investment Advisors nor LPL provides tax advice.


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