70 1/2 and RMD orgination presentation

[jmartin]

Working on a presentation regarding RMD and I am looking for insight on two basic questions:

- When were RMD's first elected? It has to be before Tefra

- Why did they choose 70 1/2 as the age?

- Whey did they decide to use a mortality table vs just using a set percent?

Any IRC you can site would be helpful as well but not required. Thanks in advance

[david rigby]

https://www.law.cornell.edu/uscode/text/26/401

Click on "Notes" for historical information.

[Tom Poje]

I believe the rules came into play under TEFRA, the original rules were actually the later of 70 1/2 or the day you retire (but were changed to simply 70 1/2 within a year or two of the initial proposed regs) so now we are back to the way they originally were, except I guess in the case of 5% owners.

why 70 1/2? I recall in regards to some reg they chose some odd date it went into effect and someone investigated and found it was a particular date that effected some congressman or senator, so it wouldn't surprise me if 70 1/2 happened to be something similar.

as for picking a mortality table, I think at the time most plans were still DB in nature, so I guess pretty much the mentality of having a pseudo life time annuity. but you could wave off the table and choose to take that initial percent and simply subtract one each year for the divisor, so in that sense it was a 'decreasing set percent'.

[mbozek]

70 1/2 was the date for RMDs of self employed persons under IRC 401© which dates back to 1962.