Insights

IRS Proposes Rules that Would Update Life Expectancy and Distribution Tables


On November 8, 2019, the IRS released a proposed rule that would update the life expectancy and distribution period tables that are used to calculate required minimum distributions (RMDs). As background, in August 2018, President Trump issued an Executive Order on Strengthening Retirement Security in America. As part of that order, President Trump directed the treasury to review the life expectancy and distribution period tables to determine if they should be updated.

Subsequently, the IRS has proposed this rule, which will update the Single Life, Uniform Lifetime, and Joint and Last Survivor Tables to recognize longer life expectancies. This will ultimately reduce annual RMDs.

The updated life expectancy distribution tables would apply for any distribution calendar year beginning on or after January 1, 2021. The IRS is also requesting comments on how often they should update these tables. Retirement plan sponsors should keep this update in mind for future RMDs.

Proposed Rule »