IRS Finalizes Life Expectancy Table Changes Affecting Required Minimum Distributions

Many employer-sponsored retirement plans, such as profit-sharing plans, 401(k) plans, 403(b) plans, 457(b), and defined benefit plans require participants who have reached a certain age to start taking Required Minimum Distributions (RMDs) out of their plan(s). The RMD rules also apply to traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs.


Under the SECURE Act, passed in December 2019, the minimum age that these distributions must start increased to age 72 for those who reach age 70½ on or after January 1, 2020.

The IRS has now finalized guidance that adjusts the life expectancy tables and applicable distribution period tables that plan administrators use to calculate the RMDs. The regulations apply to RMDs taken on or after January 1, 2022. The new regulations generally reflect longer life expectancies than the prior tables used. For example, a retired 401(k) participant whose RMD was calculated using the prior Lifetime Table was estimated to have a lifetime of 25.6 years (from age 72). Under the new tables, that same participant would be estimated to live 27.4 more years. These new regulations will not impact most defined benefit pension plans because these types of plans usually don’t use these factors in their RMD calculations.

The Secure Act increase in the RMD age and the new RMD life expectancy regulations will not only decrease the number of RMDs required annually, but decrease the amount required to be withdrawn in most retirement programs. This will allow participants to retain larger amounts in their retirement plans to account for the possibility they may live longer.

For more details, see the Federal Register page about this final regulation.  For more information about the Secure Act, see our previous blog

Please contact your TRI-AD Client Service Manager with any questions.

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