RMD related

Hi

Sorry if this was discussed before.

My first age 72 calculations for 2 different scenarios and want to confirm my understanding:

Scenario 1: Participant turning 72 on 9/1/2022, first RMD is due by 4/1/2023 and based on 1/1/2022 AB (fully vested)

If they want to take by 12/31/2022, can they take 1/1/2022 AB*12?

Scenario 2: Participant already receiving RMDs for the past few years. The past # were based on old tables and they do not need to be adjusted, correct?

The new AB portion will be calculated based on the new tables, correct?

Any corrections/comments are appreciated.

Thank you

Any takers?

Scenario 1. Taking monthly AB * 12 is typically what we do and then tell them to take the subsequent RMDs in the same month each future year.

Scenario 2. I'm not sure I follow your question. He made an election for how he is taking his benefit and that would continue.

Thank you

On 7/8/2022 at 11:00 AM, Jakyasar said:

1/1/2022 AB*12

Strictly speaking, this is the account balance as of 1/1/2022 times 12? I'm sure that is not what you meant, Jakyasar, but I'm confused.

On 7/8/2022 at 11:00 AM, Jakyasar said:

The past # were based on old tables and they do not need to be adjusted, correct?

Right. The pre-2022 RMDs, if calculated properly, satisfied the pre-2022 RMD rules, and that's over and done. You don't get a credit for the fact that the new life expectancies would produce smaller RMDs. The new tables don't apply before 2022.

On 7/8/2022 at 11:00 AM, Jakyasar said:

The new AB portion will be calculated based on the new tables, correct?

Yes. The new tables are effective for calculating RMDs in 2022 and later.

Hi Luke

Thank you for your input. I was referring to a defined benefit plan so no account balance issues.

Best

Just a side note - If in-service distribution is allowed, participant may take a full distribution of the benefits as a lump sum and use an account method for calculating RMD.