The rules in Notice 2022-6 provide some flexibility. Any month end balance as far back as the prior year end value  is acceptable as long as there have been no distributions taken between the account balance date and the start of 72t distributions. While a day end balance is also valid, it is safer to use a month end balance where there is an IRA statement for that date showing the balance for ease of documentation.  Since a higher balance generates a higher distribution, looking back at the month end statement over the past few months with the highest balance is a good plan.

But the interest rate is limited to the higher of the two months prior to the month in which the first distribution is taken, so there is less flexibility for the interest rate than for the account balance.

Clients should not use the RMD method, but if they did the last year end value should be used.

• Flag as spam
• Log in to Reply

There are three reasons:

RMD calculations result in a far lower distribution per dollar of account balance

The option for a one time switch to the RMD method to reduce the distribution is lost.

RMD calculations must be done every year instead of just once, multiplying the chance of a calculation error

• Flag as spam
• Log in to Reply