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Changed RMD Tables for 2022
Old 12-27-2021, 09:13 AM   #1
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Changed RMD Tables for 2022

I handle the RMD's for my 89 year old mother who is still as sharp as a tack. About 60% of her NW is in a tIRA so her distributions are relatively substantial. She always wants to take the RMD in full in January. Her money her choice. In any event I just looked at the RMD tables for 2022 in preparation of effectuating some sales to make the distribution next month.

FYI: I didn't realize that the Tables were revised for 2022 to reflect the Secure Act and revised mortality tables. The result is that her RMD for 2022 was about 20% less than the RMD for 2021. This was good news for her.
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Old 12-27-2021, 09:48 AM   #2
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I've been doing the same exercise for my DM.

Here's a great side-by-side table of old versus new RMDs, from Kitces:

https://www.kitces.com/current-vs-ne...count-balance/

I'm not sure how your mom's RMD dropped 20%, the tables didn't go down nearly that much (2nd to last column). If your mom was 88 this year her RMD factor was 12.7 on the old table, and at 89 next year it is almost the same at 12.9 on the new table (instead of 12.0).

Most ages are a 6-8% drop, and even less year-over-year as you age.
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Old 12-27-2021, 11:25 AM   #3
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This was very helpful. For some reason I was using the wrong factors from the IRS table and have changed to go along with this. For some reason what I had was 15.6 factor the first year instead of the 27.4 here. Continuing to learn and update my plans

The linked article shows starting this at 72 instead of 70 below
https://thefinancebuff.com/new-rmd-tables-2022.html
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Old 12-27-2021, 12:01 PM   #4
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Someone want to explain the rules for inherited IRA's inherited under the old rules? 2007 DOD in this case... Less is better, if possible!
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Old 12-27-2021, 12:04 PM   #5
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IRAs inherited under the old rules continue to use the old rules.
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Old 12-27-2021, 12:19 PM   #6
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IRAs inherited under the old rules continue to use the old rules.
Probably why it wasn't on my radar... Thanks!
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Old 12-27-2021, 12:33 PM   #7
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Quote:
Originally Posted by GrayHare View Post
IRAs inherited under the old rules continue to use the old rules.
They use the old rules but the new tables.

There is a moderately complicated calculation to do in order to switch from the old tables to the new tables. See the "One Time Reset" section of this article for example: https://thefinancebuff.com/new-rmd-tables-2022.html. The only quibble I have with that article is they use the word "allow" where I think they should use "require". I believe switching to the new tables is mandatory.
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Old 12-27-2021, 12:49 PM   #8
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They use the old rules but the new tables.

There is a moderately complicated calculation to do in order to switch from the old tables to the new tables. See the "One Time Reset" section of this article for example: https://thefinancebuff.com/new-rmd-tables-2022.html. The only quibble I have with that article is they use the word "allow" where I think they should use "require". I believe switching to the new tables is mandatory.
You are allowed to continue with reducing the old distribution period by 1, which will cause you to take out more than 2022 reset would require. The M is Minimum that is Required to Distribute - they allow you take more than the RMD. But if you want to reduce your tax bill and don't need the cash, reset.
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Old 12-27-2021, 12:53 PM   #9
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You are allowed to continue with reducing the old distribution period by 1, which will cause you to take out more than 2022 reset would require. The M is Minimum that is Required to Distribute - they allow you take more than the RMD. But if you want to reduce your tax bill and don't need the cash, reset.
Of course.

ETA: Of course, if the person wanted the absolute lowest RMD in a future year, at some point they'd need to go through the calculation to switch over to the new tables. For inherited IRAs you can't just switch to the new divisor in the new table.
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Old 12-27-2021, 01:39 PM   #10
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I made the calculation. It reduces the RMD by a decent amount. In a week, we will see if Fidelity agrees...
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Old 12-27-2021, 04:50 PM   #11
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Of course.

ETA: Of course, if the person wanted the absolute lowest RMD in a future year, at some point they'd need to go through the calculation to switch over to the new tables. For inherited IRAs you can't just switch to the new divisor in the new table.
How I read the reset requirement it is a one time decision that happens in 2022. However you calculate 2022 RMDs, you then have to subtract 1 from the number used in 2022 for each future year.
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Changed RMD Tables for 2022
Old 01-03-2022, 05:06 PM   #12
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Changed RMD Tables for 2022

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I made the calculation. It reduces the RMD by a decent amount. In a week, we will see if Fidelity agrees...

I take the RMD for a pre-Secure Act inherited IRA early in the year and it has been posted to my Fidelity account. Looks like Fidelity agrees to me.
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Old 01-04-2022, 03:53 AM   #13
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Simple as it should be, I'm still glad Megacorp/401(k) company does my one and only calculation for me. YMMV
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Old 01-04-2022, 07:28 AM   #14
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FYI, for anyone using Fidelity, I just checked, and while they link to the old tables in a couple of places, when I checked my actual scheduled RMDs that I set up with Fidelity when I inherited my (pre-SECURE Act) IRAs, the factor was from the new tables.
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Old 01-04-2022, 08:04 AM   #15
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My husband did a partial RMD yesterday from Fidelity and their calculated amount was using the new table.
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Old 01-04-2022, 08:28 AM   #16
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I was pleasantly surprised to see that Fidelity applied the new table. Technically you have a choice, but Fido assumed everyone would prefer the option to delay liquidation and take more if they chose to do so.
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Old 01-04-2022, 10:27 AM   #17
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Vanguard used the new tables on my Dad's IRA.
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Old 01-04-2022, 02:08 PM   #18
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DM has one tIRA of her own and one inherited.

Her own RMD was a simple switch to the new table.

Her inherited tIRA was scheduled to have a divisor of 0.7 by the old table for 2022, emptying it. For the new table, I substituted the new divisor for the year she started taking RMD's from the account, using her age at the time. My spreadsheet did all the minus 1's and updated the 2022 divisor to 1.1. So we don't have to empty the account this year, but there'll be just a drip left for 2023.

That all made sense to me, and the final result agreed with Fidelity's RMD calculations for both accounts.
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Old 01-14-2022, 08:17 AM   #19
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My (snake-bit) friend has had an inherited IRA which I help him manage since late 2012, when his remaining parent passed away. The divisor in his RMD calculation has been dropping by one each year, as expected, usually raising his RMD unless its year-end balance dropped by a lot like what happened in late 2018.

But for 2022, with the change in the tables, the divisor went up by 2 (years), lowering his 2022 RMD by about $300. This will be useful in the next few years because it will allow the cash-generating portion of the IRA to continue generating enough cash to pay the RMD without having to sell anything. I set up this auto-pilot feature to make managing his IRA a little easier for me (and he is fine with that).

He doesn't need the RMD to help pay his bills because he still works full-time (he is 58). We use it, instead, to pay some income taxes via 1099R withholding. This keeps his April tax bill down and assures him of avoiding any chance of underwithholding. It's all seamless and transparent, which he likes.
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Old 01-14-2022, 09:09 AM   #20
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I just wish the IRS would make it simple. All their charts are so confusing.

For my first RMD at age 72, what percentage of my 12/31/2021 IRA Rollover balance to I need to withdraw in 2022?

Now I need to project my income for 2022 in order to setup future tax withdrawal amounts. Obviously, I'll be kicked up a notch or two in tax liabilities.
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