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What will the new IRS Life Expectancy Table Mean for You?

August 09, 2021

These tables calculate your annual required minimum distribution (RMD), which is the rate at which retirees over age 72, must withdraw income from their retirement accounts (IRAs, 401Ks, 403Bs, etc.) or face stiff penalties.  To reflect a longer-living population, changes will be made in 2022 to lengthen the period of time over which distributions are required, and it will result in lower distributions at each age.

I’ve attached a table showing the previous RMD factors and percentages and new factors and percentages.  NOTE:  these take effect on January 1, 2022  New RMD Table

But wait, won’t that mean less income for you? Well…yes, but if you are able to withdraw more than the minimum if you need more income.  Be aware that with few exceptions, IRA distributions count as ordinary income on your tax return. Perhaps less tax upon distribution is not such a bad result in your particular situation. 

Plus, the recent rise in the stock market has boosted many IRA balances. With a higher balance, a higher distribution is likely required, perhaps offsetting all or more of the drop caused by the new calculation method.

There are 2 ways I will discuss here to reduce the taxation of RMDs. 

QCD: a Qualified Charitable Distribution is a direct transfer of funds from your IRA custodian to a qualified charity. In addition to the benefits of giving to charity, a QCD excludes the amount donated from taxable income and meets your RMD requirement

ROTH Conversion:  a ROTH conversion involves transferring retirement funds from a traditional IRA or 401K to a ROTH IRA account.  Income taxes must be paid on the conversion, but since ROTH is tax-free going forward, no future taxes are due.  In addition, less in the IRA/401K means a lower RMD in the future. 

Let us know if you’d like to talk more about RMDs, QCD’s, ROTH conversion or other retirement plan strategies. 


Converting from a traditional IRA to a Roth IRA is a taxable event. A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.

For a comprehensive review of your personal situation, always consult with a tax or legal advisor.  Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.