Calculating required minimum distributions from IRAs and retirement plans to change in 2022

Posted 12/8/21

As the year comes to an end and we celebrate with our family and friends, it’s important to ensure that you have complied with any Required Minimum Distributions (RMDs) from your IRA or …

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Calculating required minimum distributions from IRAs and retirement plans to change in 2022


As the year comes to an end and we celebrate with our family and friends, it’s important to ensure that you have complied with any Required Minimum Distributions (RMDs) from your IRA or retirement plan.  Failing to take out the RMD can result in a 50% penalty!  That is not a typo, 50%!  Read on for more important changes.

The IRS has issued new Life Expectancy Tables for 2022. (IRS, 2021)  Every individual subject to annual Required Minimum Distributions (RMDs) will be affected. Whether someone is taking lifetime RMDs from their own IRA or taking RMDs on an inherited account, the RMD calculation will change. While most custodians will automatically implement the new tables and make the necessary adjustments internally, it is important for advisors, IRA owners and plan participants to understand the mechanics of these changes. Ultimately, it is the responsibility of the account owner to take out the proper Required Minimum Distribution.

After more than a year of waiting, the finalized [Life Expectancy] tables will finally go into effect on January 1, 2022.

The Three Tables, despite the recent drop in overall life expectancy due to the pandemic, on average and over time, life expectancies have increased. Due to this increase, the IRS believed it was time to update the existing tables, which have been in effect for two decades. Note that the new tables do not reflect drastic changes. The boost in life expectancy factors range from no change for the oldest Americans up to an increase of 2.2 years for a newborn. Nevertheless, these slight alterations to the tables will result in somewhat smaller RMDs for just about everyone.

All three RMD life expectancy tables were revised: (IRS, 2021)

  1. Uniform Lifetime Table: Used to calculate lifetime RMDs for an account owner’s own IRA or retirement plan.
  2. Joint (and Last Survivor) Life Expectancy Table: Used instead of the Uniform Lifetime Table when a spouse is the sole IRA or plan beneficiary, and that spouse is more than 10 years younger than the IRA owner or plan participant.
  3. Single Life Expectancy Table: Under the SECURE Act, only used to calculate post-death RMDs for “eligible designated beneficiaries” (i.e., surviving spouse; minor child of the account owner/participant; chronically ill or disabled individual; those beneficiaries who are not more than 10 years younger than the owner/ participant). The Single Life Expectancy Table is also used if an IRA owner dies after the required beginning date (RBD) (April 1 of the year following the year the IRA owner turns age 72) without naming a living beneficiary, i.e., the “ghost rule.” Additionally, this table is used to calculate annual RMDs from inherited IRAs for beneficiaries who inherited prior to the SECURE Act in 2020.

The Single Life Table is never used by IRA owners or plan participants to calculate lifetime required distributions. The new tables may also be used to calculate 72(t) periodic payments. Under the Internal Revenue Code 72(t) an individual is allowed to withdraw money from pre-tax accounts prior to the age of 59 and ½ without the 10% early withdrawal penalty.  The payments must stay in place for a minimum of 5 years or until the individual becomes 59 ½.  These payments can be calculated in different ways, annuitization, amortization and required minimum distribution, from this chart. It is important to work with an advisor that has experience calculating these payments.

  The easiest change to implement is for those account owners taking lifetime RMDs based on the Uniform Lifetime Table. The Uniform Lifetime Table is a “recalculating” table. This means that each year a person will go back to the table to find his age and corresponding life expectancy factor. This new factor is then divided into the December 31 account balance from the previous year to compute the RMD. Since those individuals using the Uniform Lifetime Table are recalculating every year, identifying the appropriate number is straightforward; just go to the chart based on your age as of December 31st of the RMD year.

For those who turned (or will turn) age 72 in the second half of 2021, there is a potential added layer of complexity. The former rule was your first year of distribution was based on your age 70 and 1/2, now it is the year you turn 72.  Congress finally dropped off the ½ year. These individuals will have their first RMD due for 2021. However, a first RMD is permitted to be delayed until April 1 of the following year. Any first-time RMD taker who delays the initial RMD to the following year must take two RMDs in that following year. (IRS, 2021)  For this affected group, this could result in two RMDs being withdrawn in 2022 — one using the existing (pre-2022) Uniform Lifetime Table, and one using the new version.

As always, I recommend that you work with an experienced financial advisor when dealing with your retirement planning and IRA/retirement plan distribution options. Special thanks to the Ed Slott and Company, LLC CPAs that provided a great deal of this very technical content.


Massey & Associates, Inc is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Massey & Associates, Inc are not affiliated companies.  1122351 – 11/21

Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. Our firm is not affiliated with the U.S. government or any governmental agency. Ed Slott’s IRA Advisor Group℠ is a paid-membership, educational organization comprised of professionals of varying credentials. Membership in this organization does not imply a set level of skill or training.


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