Last fall, the Trump Administration issued an executive order that directed the Treasury Department to review the rules for required minimum distributions from qualified retirement plans. Retirement Report readers have been anxiously awaiting news since then. Finally, more than a year later, there is a new development to report: The IRS has issued new proposed life expectancy tables to calculate RMDs.
The new tables take into account longer life expectancies. The current tables stop at age 115+, but the new ones run an extra five years, to 120+. These are the first changes made to the tables since 2002.
What do the new tables mean in practice? When calculating RMDs under the proposed rules, the life expectancy factors would be higher, which means an account owner would take out a smaller amount, leaving more money to grow tax-deferred in the retirement account. For instance, the current factor for someone who is age 71 is 26.5, whereas the proposed rules would set that factor at 28.2. That change means a 71-year-old with a $1 million IRA would be required to take out nearly $2,300 less.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The new tables are not a done deal just yet. The proposed regulations must still go through a few more regulatory steps before they can be finalized. If they stay on track through that process, the new rules would be used to calculate 2021 RMDs. Proceed as usual with the current rules for 2019 and 2020 RMDs.
If you want to share your thoughts about these proposed RMD changes, you can submit a comment until January 7, 2020. To do so, and to learn more about the changes, go to federalregister.gov and search for document number 2019-24065.
The public hearing is scheduled for January 23, 2020.
-
Quiz: Do You Really Know How Social Security Benefits Are Taxed?Quiz Social Security benefits often come with confusing IRS tax rules that can trip up financially savvy retirees and near-retirees.
-
Are You Ready for 65? The Medicare Initial Enrollment Period QuizQuiz Turning 65 soon? Test your basic knowledge of Medicare's Initial Enrollment Period (IEP) rules in our quick quiz.
-
3 Ways to Stretch the 2026 Social Security COLA For Your BudgetThree steps retirees can take to stretch the Social Security COLA to fit their budgets.
-
457 Plan Contribution Limits for 2026Retirement plans There are higher 457 plan contribution limits in 2026. That's good news for state and local government employees.
-
Medicare Basics: 12 Things You Need to KnowMedicare There's Medicare Part A, Part B, Part D, Medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare — and much more.
-
The Seven Worst Assets to Leave Your Kids or Grandkidsinheritance Leaving these assets to your loved ones may be more trouble than it’s worth. Here's how to avoid adding to their grief after you're gone.
-
SEP IRA Contribution Limits for 2026SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $70,000 in 2025, and up to $72,000 in 2026.
-
Roth IRA Contribution Limits for 2026Roth IRAs Roth IRAs allow you to save for retirement with after-tax dollars while you're working, and then withdraw those contributions and earnings tax-free when you retire. Here's a look at 2026 limits and income-based phaseouts.
-
SIMPLE IRA Contribution Limits for 2026simple IRA For 2026, the SIMPLE IRA contribution limit rises to $17,000, with a $4,000 catch-up for those 50 and over, totaling $21,000.
-
457 Contribution Limits for 2024retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
-
Roth 401(k) Contribution Limits for 2026retirement plans The Roth 401(k) contribution limit for 2026 has increased, and workers who are 50 and older can save even more.
