IRA Distributions During IRA Owner's Lifetime - Tax Law Changes - Required Minimum Distributions - Qualified Retirement Plans

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Distributions During the IRA Owner's Lifetime

Required minimum distributions for IRA owners are determined by dividing the IRA balance as of Dec. 31 of the year preceding the year for which the distribution is being calculated by life expectancy factor.

The life expectancy factor is very favorable because it is actually based on the owner’s age and a hypothetical person 10 years younger. This factor is obtained from the IRS’s Uniform Lifetime Table.

Example: An IRA owner turns 72 this year. His IRA was worth $1,000,000 on Dec. 31 of last year. This year’s distribution is determined by dividing the Dec. 31 balance by 25.6 (life expectancy factor for someone age 72 obtained from the Uniform Lifetime Table).

The joint life expectancy factor may be based on the owner’s age and the owner’s spouse’s actual age when the spouse is the sole beneficiary of the IRA for the entire year and is more than 10 years younger than the owner. (See the IRS’s Joint and Last Survivor Table.)

Example: An IRA owner turns 72 this year. His IRA was worth $1,000,000 on Dec. 31 of last year. This year, his wife, as sole beneficiary of this IRA, turns 52. This year’s distribution is determined by dividing the Dec. 31 balance by 33.2 (the joint life expectancy factor for someone age 72 and someone age 52 obtained from the Joint and Last Survivor Table.)

Next: Distributions After the Owner's Death


		See Also Determination of the Designated Beneficiary Rule on Separate Accounts