Recalculation to RMD Caclulators with different numbers
L1: Recalculation to RMD Caclulators with different numbersI am switching my Amortization method to RMD this year.The calculator here comes up with a $1,200 bigger number than 6 other sites with 72t Calculators. However, one other site, Franklin Templeton, also comes up with that number.The 6 sites I choose do not all use that one plugin calculator that is on numeroussites. Although it does agree with the smaller number.Any insight into the difference?2017-01-03 17:23, By: Scott_D, IP: [188.8.131.52]
L2: Recalculation to RMD Caclulators with different numbersIf only the RMD calculations are being considered, the difference could be caused by the RMD table being used. In making the one time switch to RMD, you can use either the single life table, the Uniform table from a site that publishes divisors under age 70, or the joint life table reflecting the age of your beneficiary as well as your own. This choice allows you some minor flexibility in determining how much of a reduced distribution you want. Whether you formerlyused individual or joint with amortization is immaterial when you make the switch. Per Notice 89-25, it does not appear that your beneficiary must be sole spousal beneficiary more than 10 years younger to use the joint table, as is the case for actual RMDs.
With a difference of 1,200 it is most likely that the above is the issue, although if the difference were very small, it might have also been caused by distribution timing assumptions that some calculators build in, whereas this site uses the same assumptions regardless of the intended distribution pattern (eg early in year vs. late in year).
Which table do you want to use? Single life will produce the largest distribution, but if you want it reduced more, you would use joint life or the uniform table. Remember, that once you make the change to RMD, you must recalculate every year and use the same table every year with new account balance on same date,and ages at year end.2017-01-03 18:11, By: Alan S, IP: [184.108.40.206]
L3: Recalculation to RMD Caclulators with different numbersAdding to Alan’s excellent response — and adding increased exposure to busting your plan, even inadvertently, by making a miscalculation in any year from the beginning to the very end.2017-01-03 18:38, By: dlzallestaxes, IP: [220.127.116.11]
L3: Recalculation to RMD Caclulators with different numbersThank you Alan. I will take another look through and make sure I’m using the same table at all sites. I want to get this right so I don’t bust the plan and incur penalty.
One thing though, my distribution will actually increase with RMD since my account has grown so much since I started with the Amortization method. And that’s the main reason I want to switch.2017-01-03 20:37, By: Scott_D, IP: [18.104.22.168]
L4: Recalculation to RMD Caclulators with different numbersScott_D…
We designed our calculators to produce the same results that the IRS produced/released in their sample calculations. We don’t check other calculators. For the Minimum Distribution Method, there should be no variation in the annual distribution – it is simply the account balance and the attained in the distribution year.
If you want to do your own calculations, get IRS Pub. 590-B, Appendix B, Table 1. Take the factor for your attained age in 2017 and divide your 12/31/2016 account balance by the factor. Example: Age 50, Account Balance: $500,000… Factor is 34.2, Result = 14,619.883 rounded to 2 decimals = 14,619.88.
Btw… that is the same number produced by our calculator.
Hope this helps.2017-01-03 21:01, By: Gfw, IP: [22.214.171.124]
L5: Recalculation to RMD Caclulators with different numbersThanks! Manual calculation comes up with the same number as the other 6, but not the one here.
It seems that the Plan Age is the what makes the difference. I’m 57, but turn 58 this year.
2017-01-03 21:08, By: Scott_D, IP: [126.96.36.199]
L6: Recalculation to RMD Caclulators with different numbersIf you turn age 58 in 2017, you should use 58, not 57. Factor should be 27.0.
Same example with age 58 with $500,000 and 27.0 = $18,518.5185 rounded = $18,518.52 – same as our calculator.2017-01-03 21:21, By: Gfw, IP: [188.8.131.52]
L7: Recalculation to RMD Caclulators with different numbersThanks again! I went and read up and figured that out. Many of the other calculators have you put in your age instead of birthdate. I got all them to agree on the amount using the right plan age.2017-01-03 21:25, By: Scott_D, IP: [184.108.40.206]