New IRS Life Expectancy Tables Effective for 2022 RMDs (Jan 7, 2022)

Although RMDs were waived for 2020, the IRS released final and updated life expectancy tables that are used in calculating taxpayers' required minimum distributions (RMDs) from traditional retirement accounts (including IRAs and employer-sponsored 401(k)s). However, the IRS delayed the effective date for the new tables until January 1, 2022. Starting in 2022, account owners who have reached age 72 (up from age 70½ prior to 2020) can now use the updated life expectancy tables when calculating RMDs. For many clients, the new tables mean that RMDs will be slightly smaller beginning in 2022—because the new tables are designed to reflect longer life expectancies, so use a larger divisor. The regulations also provided a transition rule for inherited account beneficiaries. The IRS decided to delay applicability of the new tables in order to give plan recordkeepers more time to make the administrative changes needed to implement the new tables. For more information on the RMD rules, see Q 3686.