Stu Takes Two: Traditional IRA Owner
First distribution year: Stu turned 70 in March of 2018. That made 2018 his first distribution year. He is not married to a spouse who is more than 10 years younger.
- Stu enters the Uniform Lifetime table using his age as of December 31 of the distribution year – age 70. The factor is 27.4.
- Stu divides his account balance as of December 31, 2017 – $274,000 – by 27.4. His RMD for 2018 is $10,000, whether he takes the distribution in 2018 or delays until April 1 of the following year. The factor and account balance does not change.
Second distribution year: The amount of the RMD for Stu’s second distribution year – 2019 – will vary depending on whether he delayed his RMD for the first distribution year. His factor will be the same — he re-enters the table at age 71. But his account balance will be smaller if he takes his 2018 RMD in 2018 rather than if he waits and takes his 2018 RMD in 2019.
Insight: If Stu turned 70 in August instead of March, he would have turned 70½ in 2019. That would make 2019 his first distribution. He would have entered the table in 2019 at age 71.