By Sarah Brenner, JD
When it comes time to calculate your required minimum distribution (RMD) from your IRA, you may wonder which life expectancy table to use. Last updated by the IRS back in 2002, there are three possible tables for IRA owners and beneficiaries, and they can all be found in IRS Publication 590-B.
The three tables are the Uniform Lifetime Table, the Joint Life Expectancy Table, and the Single Life Expectancy Table.
Uniform Lifetime Table
If you are taking RMDs from your IRA during your lifetime, this is most likely going to be your table. This table is used by most IRA owners for figuring lifetime RMDs from their IRAs. The only IRA owners who will not use this table are those whose spouse is their sole beneficiary for the entire year and is more than 10 years younger. Beneficiaries never use this table.
Joint Life Expectancy Table
This table is used much more rarely than the Uniform Lifetime Table. This table is used only for lifetime distributions and only when your spouse is the sole beneficiary of your IRA for the entire year and is more than 10 years younger than you. Beneficiaries never use this table.
Marital status is determined as of January 1st of the year. If your spouse dies during the year and a new beneficiary is named, your deceased spouse will still be considered the sole beneficiary for the entire year, and you will use the Joint Life Expectancy Table for the year of your spouse’s death. However, it will not apply for the following year. Also, if the beneficiary is changed during the year from your spouse to anyone else, for reasons other than death, then the Joint Life Expectancy Table cannot be used.
Single Life Expectancy Table
Are you an IRA beneficiary? If so, then this is your table. This table is used by beneficiaries to compute RMDs on inherited retirement accounts. This table is never used by IRA owners to compute RMDs during their lifetime.
Be sure to use the proper table! Failure to take the correct required minimum distribution from an IRA can lead to significant penalties (i.e. 50% of the amount that was not withdrawn).