Under IRS Publication 590-B, three longevity tables are used for Required Minimum Distributions (RMDs): the Uniform Lifetime Table, the Single Life Expectancy Table, and the Joint and Last Survivor Expectancy Table. The factors in these tables are technically called Applicable Distribution Periods (ADPs).
Retirement distributions trigger income taxes, so financial advisors are expected to provide accurate RMD calculations. At a base level, each client retirement account distribution should not be greater than it needs to be. Of course, a client can request a greater distribution than the RMD amount.
On January 1, 2022, revised tables will become the norm for RMD Calculations. The new tables adjust the longevity factors by a year or two, which reflects the additional lifespans that our society is experiencing.
ProTracker Advantage® provides an extensive and easy-to-use RMD calculator and tracking tool to guide the advisor in distributing the accounts to meet the law. The new longevity tables are incorporated in the software and will automatically be invoked for 2022 RMD calculations when the calendar turns over on New Year’s Eve.
The RMD Wizard within ProTracker Advantage can calculate over 1,200 client RMDs in less than one minute. The accuracy and speed of the RMD Wizard provides significant time savings over manual calculations, spreadsheets, and hand calculators. How do you want to spend your time?
Learn more about calculating RMDs and documenting them here.