The Piano Man’s First RMD
By Sarah Brenner, JD
Follow Us on Twitter: @theslottreport
Every single month since January of 2014, Billy Joel has headlined a sold-out show at Madison Square Garden. Demand for tickets to see the Piano Man has not waned. Ticket sell out quickly. Millions of fans will attest that Billy Joel, who’s music career spans decades, still puts on an incredible show.
It’s hard to believe that Billy Joel just recently celebrated his 70th birthday on May 9, 2019. We don’t know for sure that Billy has an IRA, but if like millions of Americans he does, then 2019 is an important year for him.
Tax rules require that all traditional IRA owners must begin taking required minimum distributions (RMDs) from their accounts during their lifetimes. The first RMD must be taken for the year the IRA owner reaches age 70 ½. The deadline for taking the first RMD is April 1 of the following year. RMDs for years that follow the first year must be taken by December 31.
As mentioned, Billy Joel’s 70th birthday was May 9, 2019. That means he will be 70 ½ this year and needs to take an RMD from his IRA for 2019. He must take this RMD by April 1, 2020. If he delays taking his 2019 RMD until next year, he must also take his 2020 RMD in the same year by December 31, 2020.
How would Billy Joel’s RMD be calculated? Calculating an RMD is pretty straight forward. To determine the RMD, the IRA’s December 31 prior year balance is divided by a life expectancy factor. Life expectancy factors can be found using tables provided by the IRS located in IRS Publication 590-A. Use Billy’s age in 2019 (age 70) to find his life expectancy factor.
Most IRA owners will use the Uniform Lifetime Table to determine the life expectancy factor used to calculate their RMD, but Billy Joel may not. His fourth wife, Alexis Roderick, is more than ten years younger than him. If he names her as his sole primary beneficiary of his IRA, then he would use the Joint Life Expectancy Table and be able to take a slightly smaller RMD. This is because the rules say that if a spouse is the sole primary beneficiary of an IRA and is more than ten years younger than the IRA owner, the Joint Life Expectancy Table is used instead of the Uniform Lifetime Table.
As Billy Joel celebrated his 70th birthday with a show this past May at Madison Square Garden, he was asked if he had plans to retire. He said no and his busy 2019 concert schedule, including stops in London, Texas and Philadelphia, is proof. The Piano Man may have started RMDs, but like many older Americans, he has no plans to stop working anytime soon.
Content Citation Guidelines
Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.
Please be advised that prior to distributing re-branded content, you must send a proof to email@example.com for approval.
For white papers/other outflow pieces:
Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.
Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.
For Slott Report articles:
Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.
Please contact Matt Smith at firstname.lastname@example.org or (516) 536-8282 with any questions.