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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