By Stephen J. Silverberg
New York Elder Law Attorney

This November, the IRS issued proposed regulations changing the life expectancy tables and distribution period tables for computing the required minimum distribution (RMD). This information is used for owners of retirement accounts and their beneficiaries for inherited accounts, to calculate their withdrawals. Keep in mind, under the SECURE Act, beginning in 2020, the starting age for IRA distributions increases from 70 ½ to 72.

The Department of the Treasury and the IRS examined the life expectancy and distribution tables along with current mortality data. They concluded that the tables need to be updated to reflect current life expectancy.  The new information was based on mortality rates for 2021.

Not surprisingly, American life expectancy has increased. Under the prior tables, a married couple within 10 years of each other’s age would have a life expectancy at age 70 of 27.4 years. Under the new table, the life expectancy would be 29.1 years.

A longer life expectancy means a smaller RMD. That’s excellent for purposes of wealth preservation and transfer.

Here is an example of what this might mean for a 73-year-old couple with a $560,000 IRA beginning of year balance.

• Under the old table, they would have an RMD at age 73 of $22,672.
• Under the new table they’d have a smaller RMD of $21,212.
• Under the old table, if one of them lived to age 95, and they made 6%, they’d take out (and pay taxes on) about $920,000 of total RMDs and have an ending balance to the beneficiaries of about $448,000.
• Under the proposed table, they’d take out (and pay taxes) on about $907,000 of RMDs and have an ending balance of about $495,000.

If you have not yet taken your RMD for 2019, the window is closing quickly.

Contact your financial institution or advisor to ensure that you meet the requirements for RMDs for 2019.

About the Author
Stephen J. Silverberg is nationally recognized as a leader in the areas of estate planning, estate administration, asset preservation planning, and elder law. He is a past president of the prestigious National Academy of Elder Law Attorneys (NAELA), and a founding member and past president of the New York State chapter of NAELA.
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