What You Should Know about RMDs for 2022

Required Minimum Distributions (RMDs) have seen a handful of changes in the past two years – most notably by the SECURE Act (passed in late 2019) and the CARES Act (passed in March 2020). In the following post, we will detail the newest RMD change for 2022 as well as what this means for retirement account holders. 

To start – what is an RMD? An RMD, or Required Minimum Distribution is a specific amount of money that an account holder must distribute each year from a tax-deferred retirement account after reaching age 72 (or 70.5, if born before 1949). 

Those subject to RMDs have some flexibility in terms of when the distribution must occur. RMDs must be fully distributed by 12/31 each year but can be taken at any time during the year.  Account holders also have flexibility in how distributions are made. Some folks choose to take their RMDs throughout the year in the form of monthly or quarterly distributions. Others prefer to have a lump-sum distributed at a particular time each year. Regardless of when or how RMDs are taken, the distributions can be used to fund ongoing cash needs, fund an annual charitable contribution, or simply reinvested outside the retirement account for future use. 

The first round of changes to RMD requirements occurred with the passing of the SECURE Act in 2019. This Act adjusted the required beginning  date from age 70.5 to 72. The SECURE Act also changed the way distributions from inherited retirement accounts must be treated. Shortly following the passing of the SECURE Act, a global pandemic prompted the passing of the CARES Act – waiving the RMD requirements for 2020 only. 

Change to RMDs in 2022

Effective 1/1/2022, the IRS has updated the life expectancy tables used to calculate RMDs each year. The new tables use a slightly longer life expectancy. This results in a slightly smaller RMD than would have previously been required. 

This is not the first time RMD tables have been adjusted to account for longer life-expectancies. The last change occurred in 2002. 

It’s important to note that all RMDs are not created equally. For those taking RMDs from a traditional retirement account (such as an IRA or employer sponsored plan, like a 401k), RMDs will likely be based on the Uniform Life Table or the Joint Life Expectancy Table (which may be used for couples where the spouses are at least 10 years apart in age). 

For those who inherited a retirement account before 1/1/2020, RMDs are based on the Single Life Expectancy Table (with some adjustment possible based on your age at the time you began distributions from the account). For those who inherited a retirement account after 1/1/2020 – an inheritor may not be subject to an annual RMD requirement at all. In most instances, the full account balance must be distributed within 10-years – but distributions can be deferred to the very end of the full 10 year period. Spousal beneficiaries and beneficiaries who are minor children (but not grandchildren) can extend distributions over a longer period than 10 years. 

If you have questions regarding your RMD strategy, we encourage you to contact your advisor. For more information, you can also visit irs.gov for some frequently asked questions about RMDs. 


Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future  performance of any specific investment, investment strategy, or product (including  the  investments  and/or  investment  strategies  recommended  or  undertaken by Private Ocean,  LLC [“Private  Ocean”]),  or any  non-investment  related  content,  made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated  historical  performance  level(s),  be  suitable  for  your  portfolio  or  individual situation,  or  prove  successful.  Due  to various  factors,  including  changing  market conditions  and/or  applicable  laws,  the  content  may  no  longer  be  reflective  of  current opinions  or  positions.   Moreover,  you  should  not  assume  that  any  discussion  or information  contained  in  this  blog  serves  as  the  receipt  of,  or  as  a  substitute  for, personalized investment advice from Private Ocean.  Please remember that if you are a Private Ocean client, it remains your responsibility to advise Private Ocean, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/ evaluating/ revising our previous recommendations and/or services, or  if  you  would  like  to  impose,  add,  or  to  modify  any  reasonable  restrictions  to  our investment advisory services. To the extent that a reader has any questions regarding the applicability of any  specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Private Ocean is  neither  a  law  firm  nor  a  certified  public  accounting  firm  and  no  portion  of  the  blog content should be construed as legal or accounting advice. A copy of the Private Ocean’s current written disclosure Brochure discussing our advisory services and fees is available for  review  upon  requestor  at www.privateocean.com. Please note: Private  Ocean does not  make  any representations  or  warranties  as  to  the  accuracy,  timeliness,  suitability, completeness,  or  relevance  of  any  information  prepared  by  any  unaffiliated  third  party, whether  linked  to Private  Ocean’s web  site  or blog  or  incorporated  herein,  and  takes  no responsibility  for any  such  content. All  such  information  is provided  solely  for convenience  purposes  only  and  all  users  thereof  should  be  guided  accordingly. Please also note: If  you  are  a Private  Ocean client, please  advise  us if  you  have  not  been receiving account statements (at least quarterly) from the account custodian.