IRS Considers Changing RMD Calculation Formula

Over the next few months, the IRS will be considering an update to the formula used to calculate Required Minimum Distributions (RMDs) for retirement plans, IRAs and annuities.  The reason behind this update is to account for longer life expectancies.  Stakeholders will be able to submit written comments until January 7, 2020 and the IRS will hold a public hearing on January 23, 2020.

Stratus will be submitting a written comment in favor of making updates to account for longer longevity because mortality assumptions used by the IRS are outdated in many cases (some data is almost 20 years old).  Further, updating the RMD formula would help to decrease the per year RMD's and thus help investors with retirement plan accounts, IRAs and/or annuities reduce their taxable income from these assets.  

If you have thoughts on this topic that you would like Stratus to consider for inclusion in our written comments please email or call.  We would love to hear from you.