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Status of new RMD tables?
Old 09-30-2020, 10:15 PM   #1
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Status of new RMD tables?

I know that the IRS has proposed new tables to be used to calculate RMDs. All the articles I can find talk about the new tables, what their effect is, and what the new table values are.

What I would like to know, but cannot seem to find with my google-fu, is whether these new tables have been formally adopted or not. The comment period and public hearing were supposedly back in the early part of this year, but I have seen no followup.

I went ahead and updated my RMD projections spreadsheet, since I'm scheduled to start RMDs in 2041, so I think they'll take effect by then

Anyone know for sure whether they're really in effect or not?
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Old 10-01-2020, 01:35 AM   #2
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Anyone know for sure whether they're really in effect or not?
Schwab and the other brokers provide RMD calculators which should be updated if/when it takes effect. If you go to Schwab's site they indicate updates coming:

https://www.schwab.com/ira/understan...alculators/rmd

We have Fidelity automatically do mom's RMD annually and I'm sure if/when the time comes, they'll implement it and adjust the amount withdrawn.
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Old 10-01-2020, 08:06 AM   #3
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I haven't been paying attention. What sort of changes are being proposed?
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Old 10-01-2020, 08:10 AM   #4
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I think they are simply updated to a longer lifespan so percentages drop slightly for RMDs.

Quote:
The new life expectancy tables will result in the first RMD for an owner age 72 dropping from 3.91% to 3.67%.

Table showing RMD for a range of life expectancy
From https://rodgers-associates.com/blog/...-a-difference/
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Old 10-01-2020, 08:28 AM   #5
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Originally Posted by njhowie View Post
Schwab and the other brokers provide RMD calculators which should be updated if/when it takes effect. If you go to Schwab's site they indicate updates coming:

https://www.schwab.com/ira/understan...alculators/rmd

We have Fidelity automatically do mom's RMD annually and I'm sure if/when the time comes, they'll implement it and adjust the amount withdrawn.
Looks like the changes coming to the Schwab calculator are due to the new 72 starting age.
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Old 10-01-2020, 08:48 AM   #6
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Sounds like some new table was adopted although it is not clear if there were any changes to the proposed table.
https://www.irs.gov/retirement-plans...-distributions

https://rodgers-associates.com/blog/...-a-difference/

The changes will be in effect for 2021 so plenty of time to figure things out.
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Old 10-01-2020, 12:35 PM   #7
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Thanks everyone.

I guess what I was hoping for is an IRS announcement saying, "Hey, we had our hearings and nobody complained, so we adopted the proposed tables and they're now in effect." Or articles saying "Hey, those RMD tables that the IRS proposed? Yeah, they're now for reals." I haven't really seen those - just "These tables are probably going to be used starting in 2021." sorts of articles.

I'm not sure I understand the statement on the Schwab website about the SECURE Act and RMDs, since really all that changed, as far as I'm aware, was the required beginning date. Which really shouldn't change the calculator at all - put in your age, your balance, and the results should be the same pre-SECURE vs. now. But there may be other RMD-related SECURE Act changes that don't apply to me so I've ignored them.

Anyway, thanks everyone for the replies.
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Old 10-01-2020, 12:39 PM   #8
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Thanks everyone.

I guess what I was hoping for is an IRS announcement saying, "Hey, we had our hearings and nobody complained, so we adopted the proposed tables and they're now in effect." Or articles saying "Hey, those RMD tables that the IRS proposed? Yeah, they're now for reals." I haven't really seen those - just "These tables are probably going to be used starting in 2021." sorts of articles.

I'm not sure I understand the statement on the Schwab website about the SECURE Act and RMDs, since really all that changed, as far as I'm aware, was the required beginning date. Which really shouldn't change the calculator at all - put in your age, your balance, and the results should be the same pre-SECURE vs. now. But there may be other RMD-related SECURE Act changes that don't apply to me so I've ignored them.

Anyway, thanks everyone for the replies.
I think you're right. We've all seen the proposed tables, and the comment period, etc. is over - but there hasn't been an actual approval acknowledgement yet. All the IRS documentation still shows the pre-SECURE act Life Expectancy AND Uniform Lifetime tables. I am sure the IRS (and all the brokers) will announce approval and update the tables when they're official, well before Jan 2021.

It's still a proposal in the FR as far as I can tell https://www.federalregister.gov/docu...mining-minimum
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Old 10-01-2020, 12:39 PM   #9
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For the heck of it, I called the federal government and left a message asking them this question. I will post an update to this thread with their reply.
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Old 10-01-2020, 01:22 PM   #10
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For the heck of it, I called the federal government and left a message asking them this question. I will post an update to this thread with their reply.
Hopefully you will get the reply before you turn 70.
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Old 10-01-2020, 07:43 PM   #11
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Originally Posted by kaneohe View Post
Sounds like some new table was adopted although it is not clear if there were any changes to the proposed table.
https://www.irs.gov/retirement-plans...-distributions

https://rodgers-associates.com/blog/...-a-difference/

The changes will be in effect for 2021 so plenty of time to figure things out.
Yes, I saw this thread and wondered, but RMDs were suspended for 2020, right? DW has a small inherited IRA, so we need to keep on top of that (but Fidelity, and most others I think, provide the info, so it's easy). I probably still will pull some, I hope to get it to zero before my age 72, it fits in with Roth conversion strategy, and just to simplify - one less account for us/heirs to deal with. And if it looks like I need to have more Fed/State withholding, I can do it from the IRA withdrawal, and it counts as being spread across the whole year, which I like better than doing quarterly estimates.

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Old 10-01-2020, 09:25 PM   #12
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It’s not clear yet whether the RMD table will be updated for 2021.

The article quoted and linked above said “most likely”
Quote:
On November 7, 2019, nearly 15 months after the Executive Order was issued, the Internal Revenue Service (IRS) released proposed updated life expectancy and distribution period tables. The proposal must go through the formal approval process and will most likely take effect in 2021. The proposal includes updates to the factors used to calculate RMDs in each of three different life expectancy tables:
Maybe we’ll hear something by December.
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Old 10-02-2020, 06:08 AM   #13
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Originally Posted by SecondCor521 View Post
I know that the IRS has proposed new tables to be used to calculate RMDs. All the articles I can find talk about the new tables, what their effect is, and what the new table values are.

What I would like to know, but cannot seem to find with my google-fu, is whether these new tables have been formally adopted or not. The comment period and public hearing were supposedly back in the early part of this year, but I have seen no followup.

I went ahead and updated my RMD projections spreadsheet, since I'm scheduled to start RMDs in 2041, so I think they'll take effect by then

Anyone know for sure whether they're really in effect or not?
Not at all being critical but with 2041 as your projected date for first RMD I would expect MORE changes in RMDs (maybe different tables and maybe different age requirements.) I'm only suggesting that the minor proposed changes for this (or next) year may be eclipsed by future changes. Not that you shouldn't prepare, but I guess I (emphasis on "I") wouldn't over plan based on events of 2021. Just a thought as YMMV.
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Old 10-02-2020, 11:30 AM   #14
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Not at all being critical but with 2041 as your projected date for first RMD I would expect MORE changes in RMDs (maybe different tables and maybe different age requirements.) I'm only suggesting that the minor proposed changes for this (or next) year may be eclipsed by future changes. Not that you shouldn't prepare, but I guess I (emphasis on "I") wouldn't over plan based on events of 2021. Just a thought as YMMV.
Yeah, I get your point.

I was sort of poking fun at myself with that comment, because it's pretty much worthless to do detailed planning ~21 years in advance since, as you note, things will almost certainly change between now and then.

On the other hand, this kind of thing keeps me off the streets at night, is mildly entertaining, and does give me at least a little bit of guidance today in terms of how much I want my Roth conversions to be for now.
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Old 10-10-2020, 01:41 PM   #15
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by Alan S. Sat Oct 10, 2020 2:11 pm (from BH)

The IRS has still not officially approved the new RMD tables proposed a year ago to start in 2021. While approval was widely expected, the longer this takes the greater the possibility of an approval made after Thanksgiving, in which case some custodians including VG may not have their systems updated by 1/1.
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Old 10-10-2020, 02:17 PM   #16
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Originally Posted by kaneohe View Post
by Alan S. Sat Oct 10, 2020 2:11 pm (from BH)

The IRS has still not officially approved the new RMD tables proposed a year ago to start in 2021. While approval was widely expected, the longer this takes the greater the possibility of an approval made after Thanksgiving, in which case some custodians including VG may not have their systems updated by 1/1.
Thanks for the followup.

It just occurred to me that this will affect my Dad, who is set up for auto-RMDs with VG on a monthly basis (1/12th of his RMD amount on the 15th of every month).

I suppose if there is a timing issue Vanguard will work it out. Or my Dad will end up taking out ~8% more than his (newly lowered) RMD, which is also not the end of the world.
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Old 10-10-2020, 03:46 PM   #17
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I just checked the irs site and it still shows the old factors: https://www.irs.gov/publications/p59...link1000231258
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Old 10-10-2020, 04:13 PM   #18
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I'm not sure I understand the concern about 1/1 here unless someone wants to take their whole RMD right away. We just draw as we need money and monitor where we are with the RMD number to make sure we're compliant by year end. No urgency at all to know an exact number.
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Old 10-10-2020, 04:27 PM   #19
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I'm not sure I understand the concern about 1/1 here unless someone wants to take their whole RMD right away. We just draw as we need money and monitor where we are with the RMD number to make sure we're compliant by year end. No urgency at all to know an exact number.
OldShooter, your approach sounds very wise and efficient. Heh, heh, also sounds like w*rk! I just pull once a year, usually within the first quarter. I stick it all in the checking account and use out of that for the rest of the year. Absolutely, that means I leave (potential) gains behind. Since I can live without the gains and (realistically, without taking significant investment risk) it ain't that much. That way, I never have to REMEMBER to be SURE I've taken out enough to avoid the draconian penalties either. Your way is much more elegant. I'm okay with mine even though YMMV.
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Old 10-10-2020, 04:50 PM   #20
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OldShooter, your approach sounds very wise and efficient. Heh, heh, also sounds like w*rk! ...
Thanks for the flowers, but I am a very lazy person. Every time I go to my Schwab IRA account to withdraw money, they tell me how much I have withdrawn YTD and remind me of my RMD. It's on the same page as the withdrawal form. So it's really zero effort to monitor. I'll just have to remember that early 2021 the Schwab number may not be dead nuts precise.

Re pulling early in the year, any time we sell it is a market timing decision. I don't leave my money in the IRA because I'm necessarily trying to capture the year's growth. I just never know where the market is going, so dribbling it out is kind of a reverse DCA. If I wanted to avoid market effects I could just sell any necessary equities on January 2nd and leave the money in the account to earn the current pittance.
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