# Federal Mid Term Rate when using the Required Minimum Distribution Method

L1: Federal Mid Term Rate when using the Required Minimum Distribution MethodI hope someone can help me with this. I first calculated the 72T amount last year (2009) using the required minimum distribution method. My understanding is that I need to take the account value from 12/31/2009 to calculate the distribution amount for this year, 2010. I am just taking the distribution on an annual basis in October of each year. My question is this: When calculating the new distribution amount, do I continue to use the reasonable interest rate from October 2009 (when I first calculated the distribution amount) or do I use the current rate? There is a difference of about 1% in the rate so it does affect the amount.

Any input is appreciated!2010-09-15 21:36, By: MJ, IP: [67.63.146.210]

L2: Federal Mid Term Rate when using the Required Minimum Distribution MethodIf you are using the minimum distribution method, there is no interest rate. The calculation is based age.

Merely take the factor based on your age at the end of2010 and divide by the previous 12/31 balance. You aren’t limited to October, you can take it at any time during the year.2010-09-15 21:45, By: Gfw, IP: [24.148.10.164]

L3: Federal Mid Term Rate when using the Required Minimum Distribution MethodI guess no one else has read this yet, or if they did, they trust gfw to always be correct.

However, to clarify, he inadvertently reversed the formula. He meant to say that you divide the 12/31/09 account balance by the age divisor, which is the same as dividing the divisor into the account balance. ( But Not to ” take the factor for your age and divide (it) by the account balance.)

There’s a first time for all of us.2010-09-15 23:08, By: dlzallestaxes, IP: [72.78.110.86]

L4: Federal Mid Term Rate when using the Required Minimum Distribution MethodDlz… thanks. I was probably having a senior moment.2010-09-16 00:04, By: Gfw, IP: [24.148.10.164]

L5: Federal Mid Term Rate when using the Required Minimum Distribution MethodYou must also use the same table that you elected in the first year of the plan, ie. either the single life expectancy table, the uniform table,or the joint life and last survivor table. You cannot switch to a different table, but if you happen to have used the joint table, it must reflect the age of the actual beneficiary on the IRA. So be very careful if you happen to have changed your beneficiary. Use the oldest beneficiary of the IRA as of Jan 1 of the current year if you are using the joint table.

Don’t know why anyone would choose the Uniform Table, because it will just reduce the annual distribution calculation. Most uniform tables you will find start at age 70 since the primary purpose is for RMDs. But Appendix A to RR 2002-62 contains a Uniform Table that starts at age 10 should anyone want to take a look. It will contemplate that your beneficiary is 10 years younger than you are regardless of their actual age.

2010-09-16 00:41, By: Alan S., IP: [24.116.165.60]

L3: Federal Mid Term Rate when using the Required Minimum Distribution MethodWow…..I completely missed that the interest rate does not change the distribution amount when using the RDM method. Thank you to everyone for clarification. I plugged this into an online calculator and it gave me all three methods along with the distribution amounts for three different interest rates. The amortization and annuitization method change based on the interest rate but the RMD does not. I just failed to see that until you all pointed it out to me.

Thanks again for all of the help!2010-09-16 13:32, By: MJ, IP: [67.63.146.210]