As the calendar turned to 2022, those that are requited to take RMD’s (Required Minimum Distributions) from their IRA and or other qualified taxable accounts, became a few years younger in the eyes of the IRS! YAY !
New Uniform Table Makes You Younger
If you did not feel younger after the turn of the calendar to 2022, don’t feel bad, the IRS sees you as younger … maybe living 10% longer….
What Happened?
The IRS updated their mortality tables as can be seen HERE in this terribly formatted release:
III. Updated Life Expectancy and Distribution Period Tables
The life expectancy and distribution period tables in these regulations have been developed based on mortality rates for 2022. These mortality rates were derived by applying mortality improvement through 2022 to the mortality rates from the experience tables used to develop the 2012 Individual Annuity Mortality Basic Tables (which are the most recent individual annuity mortality tables). As was the case in the proposed regulations, the separate mortality rates for males and females in these experience tables, which were based on the 2000-2004 Payout Annuity Mortality Experience Study,[11] have been projected from the central year of 2002 using the respective mortality improvement rates from the Mortality Improvement Scale MP-2018 for males and females.[12] The mortality table in these regulations was developed by blending the resulting separate mortality rates for males and females using a fixed 50 percent male/50 percent female blend.
What does it mean?
All other things being relatively equal, you will not have to take as much out/(pay taxes on) the distributions of our qualified account, because the amount may be less … YAY … thereby making you younger in the eyes of the IRS, because we are all living longer!
So we are younger, don’t have to take as much of and RMD, which means less taxes? Yep… sign me up!
Have a Great ‘Living Longer, Less Taxes” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.