IRS Issues New RMD Tables...for 2022!

By Ian Berger, JD
IRA Analyst

Good news! You can look forward to somewhat smaller required minimum distributions (RMDs) from your IRA and company retirement savings plan beginning in 2022. That’s because, on November 6, the IRS released new life expectancy tables that are used to calculate RMDs. The new tables are not effective until 2022. RMDs are waived for 2020, and RMDs for 2021 will be calculated under the current tables.

The IRS revised the current tables, which have been in effect since 2002, to reflect the fact that Americans are now living longer. Last November, the IRS issued proposed regulations that were supposed to go into effect for 2021. However, because the final regulations were issued so late in 2020, the IRS delayed the new tables another year to give custodians and record keepers enough time to implement them.

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How to Take Money From Your Retirement Account Because of the Pandemic

Every month, IRA expert Ed Slott is taking your questions about Individual Retirement Accounts on AARP:

I'm 62, single, no children, self-employed. I'm slowly recuperating from C19, although I'm a long way from recovered.

I have a Roth IRA and a rollover IRA. May I withdraw all of these moneys now, and repay/replace these funds in three years without tax implications? If not, what are the tax implications? Also, is there a way to borrow from my 401(k) without tax implications?

I will be receiving several large payments in the next one to three years, which I will use to repay these funds, if I live long enough.

Glad to hear you are recovering. That's the most important thing, and should be your priority. As for withdrawing from your retirement plans, that should be a last resort, because you'll need that money in retirement.

Q: Is there any problem with someone who is self-employed and has an active SEP making a deductible SEP contribution and an IRA QCD after age 70 1/2? In this case, the QCD would come from the IRA while the SEP continues to be funded. Does any offset apply?

Answer

Q: We have a client that passed away in November of 2019 at the age of 85. Her beneficiaries would be required to take their RMD in 2020. Are they eligible under the CARES Act to forgo that RMD for this year?

Answer

Q: Obviously, the CARES Act changes various aspects of retirement plans & IRAs. One question which arose today was where a client who would normally be subject to a 2020 RMD (but now does not have to take it due to the CARES Act waiver) – wants to convert her IRA to a Roth. Since there is no RMD, I am presuming the whole IRA can be converted – correct? Normally, she would have to take her RMD, then convert the balance, but this year may be different?

Answer

Q: My father passed away in 2019 and left me an IRA. Will the SECURE Act apply, or will it be grandfathered under the pre-2020 rules?

Answer

Have a question for our IRA Technical Team?
Email your questions to us at [email protected]. Selected questions will be featured every Thursday in the Slott Report.

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