First Minimum Required Distribution calculation and appropriate factors to use on Uniform Lifetime table

[tritrang510]

Hi,

I turned 70 1/2 on 04/2019, but I haven't made the withdrawal for the RMD by December 31, 2019, and the deadline to make the first RMD for 2019 will be on 04/01/2020. I am getting confused on which denominator to use when calculating my first RMD:

- Should I use the balance on 12/31/2018 to calculate the 2019, and balance as of 12/31/2019 to calculate the subsequent RMD.

- Which distribution period to use on the Uniform Lifetime table when calculating my first RMD for 2019? 

Hoping the community would help on this.

[JohnB5677]

Your RMD amount is calculated by dividing your tax-deferred retirement account balance as of December 31 of last year (2018) by your life expectancy factor. Your life expectancy factor is taken from the IRS Uniform Lifetime Table.

This worksheet may help IRS RMD Worksheet

[fanfare]

The fact that you're doing this in the grace period does not change the calculation.

Your Minimum is going to be the same amount if you take it now or did so in November 2019.

After that's all done, figure your 2020 RMD separately, using the next divisor.

[tritrang510]

Thank you for your prompt reply. just to clarify,

since I am taking the first RMD for 2019 in 2020, which factor should I used? The factor of age 71 or 72?

[fanfare]

The divisor is going to depend on which month you turned 70 1/2.

So please state your birthday.

[fanfare]

oops, OK I see you said April.

Your divisor is 27.4, unless your spouse's age differs by more than 10 years.

[fanfare]

oops again.

Your birthday was NOT April.

The divisor to use for 2019 is listed next to your age as of your birthday in 2019.

and that was age "71".

The divisor is 26.5.

[tritrang510]

Thanks so much for the clarification. So when figure out the 2019 in this grace period, the RMD for 2020 will be using balance as of Dec 31, 2019 divided by divisor of my birthday in 2020 which is 25.6 at 72. Am I correct? Just making sure. 🙂

[fanfare]

You got it.

[fanfare]

Your 2020 RMD doesn't have to come out until Dec 31. 
You can take it now if you want to get it over with.
But, as you can see, the minimum doesn't change between now and then.