Some Potential Good News for Retirement Account Owners

For those of us who are looking for some good financial news these days, we finally have some!

For the first time in 20 years, the life expectancy tables, which dictate the amount of money which must be withdrawn annually from retirement accounts, have been updated.  These tables show a life expectancy at birth of 84.6, up from 82.4. 

Why is this good financial news? 

Required Minimum Distributions (RMDs) from retirement accounts will be going down in 2022, and not because the market is down!

The Required Minimum Distribution (RMD)  is calculated by dividing each retirement account balance at prior year end (December 31, 2021) by the life expectancy factor calculated by these life expectancy tables.  That also means the tax bill on these distributions will also be going down. 

If you have to take a RMD for 2022, you will use these new tables, even if you have been taking distributions for years or inherited an IRA years ago.  The RMDs shown at Ameritrade have been updated to reflect this new guidance. 

NOTE:  There is also some chatter about an increase to the age at which RMDs are required to start, but nothing official yet.

As always, call or email with questions!