pub 590 Distribution Period
Distribution period. This is the maximum number of
years over which you are allowed to take distributions
from the ira.
This is from pub 590 pg 36 and talks about an ira owners rmd’s. ( note I said owner and not beneficiary)
How can this be? If I am age 70 my distribution period is 27.4 which according to this means I cant take distributions past age 97.4. But when I hit 98 I have a factor of 7.1 and 99 6.7 and so on. In others my understanding of the rule is that if i live beyond age 98 I have to keep on going until I am dead, ( for this discussion lets forget beneficiary rules)
Do I get to stop at age 98 , or 97.4 to be exact, as the rule clearly says?
would render this statement in pub 5909 a mistake?
Permalink Submitted by Alan Spross on Tue, 2008-12-16 04:49
Chuck,
I think it’s just less than ideal wording for what they intend to communicate. Since the M in RMD stands for minimum, I think the Pub is trying to say that you cannot plan to stretch the IRA longer than the divisor for the taxpayer’s age. They are saying that the max number of years the table allows you to plan for is 27.4, but it should not be worded to suggest that you can or must stop distributions at 98. Actually, if you are still alive then, you must continue using the appropriate divisor, and even at 115 there are still a few bucks left in the account.
Permalink Submitted by Denise Appleby on Thu, 2008-12-18 05:05
Another way to look at it is…the life expectancy tables take the position that if you have lived ‘this long’, then you will likely live longer than the original projected period. Notice for all the tables that the older you get, the longer you are expected to live? This also helps to ensure that you do not outlive your funds, if you take the minimum amount each year.
So, it is not that they made a mistake, but that adjustments are made each year to the effect of “ if you made it thus far, then it is likely that you will live longer than we initially thought you would ” or something like that.