Required minimum distributions: IRS proposes updated tables

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By Milliman Employee Benefits Research Group | 20 November 2019

The IRS has issued a proposed rule that would amend the life expectancy and distribution period tables used to calculate required minimum distributions (RMDs) from qualified retirement plans, profit-sharing and stock bonus plans, individual retirement accounts (IRAs) and annuities, and 403(b) and 457 plans and certain other tax-favored employer-provided retirement arrangements. The IRS proposes to apply the updated tables after it issues the rule in final form and no sooner than for distributions beginning on or after Jan. 1, 2021. Therefore, RMDs for 2020 are generally not affected and cannot be calculated using the new proposed tables.

The proposed updated tables reflect longer life expectances for males and females than under current tables, thereby resulting in smaller RMDs and longer payout periods.