Free advice from Toolsformoney.com:

MRDs are the IRS's way to ensure people pay back the taxes they saved
when they contributed by forcing them to make taxable withdrawals.

The basic theory: A divisor is applied based on life expectancy of age
115. This divisor increases annually. For example, at age 80 it's 18.7
and for 90 it's 11.4 and for 115 it's 1. So the amount of money one has
is just divided by the divisor and that's how much needs to be
withdrawn. So if one had $100,000 and was 80, then $5,348 is the MRD.

Many more details on all of the different methods can be found here:
http://toolsformoney.com/financial_tools.htm

--Mike...


Jim W. wrote:
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Jim W. wrote:
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Ah, yes ... but isn't it ever so sweet when you are right?:-)

"Jim W." <jw[at]unearthly.net> writes:

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The relevent numbers are life expectancy at a given age. Every year
you continue to live, your life expectancy actually goes _up_.

ie. if you've survived the year, all the folks who didn't -
who previously brought down the average, well, their gone.

- quote -

(single life - joint is a little more complicated) starts
at a life expectancy of 82.4 at birth (age 0). You'll note
then that life expectancy at 55 is 29.6 - a total age of 84.6.

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It implies exactly that - folks whove made it to 71 can expect
to live - on average - another 27.4 years. It's the difference
between life expectancy at *birth* and life expectancy at 71.
All the folks who died before age 71 - who brought the average
at birth down to 82.4 - are now gone from the average.


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

Jim W. wrote:
- quote -

Your estimated life span is contingent on your age and for a 70 year
old would be approximately 15 years (less for a male, more for a
female). If you have designated a spouse as a beneficiary, the lifespan
is based on the joint probability of at least one person remaining
alive that number of years, which partially explains the 27.4 years.
There may be some additional weightings to increase the number of years
to avoid premature draw down. I haven't found the complete explanation
yet, but like others suggest, it might be better to move funds from a
regular IRA to a Roth so that the RMD doesn't exceed your normal living
expenses.

--
Ron

"Ron Peterson" <ron[at]shell.core.com> wrote in message
news:1156522322.287629.84940[at]m73g2000cwd.googlegroups.com...
<SNIP> > So my question is "What is the theory behind the tables?"
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somewhere around 76 years. The first number in the table is 27.4. This
implies to me the number 27.4 is not the number of years I'm expected to
live past the age of 71, but a number derived by other means. My question
is what goes into that derivation?

Of course I'm wrong way more times than I'm right.

JW

"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote in message
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here regarding funding your 401k up to employer match and then fund your
Roth IRA.
http://www.kiplinger.com/personalfin...01kvsroth.html

The RMD is designed for tax collection.
It doesnt mean you have to spend the whole distribution.

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This is the primary advantage of a Roth over a Traditional IRA. There is no
RMD requirement.

Elizabeth Richardson

Jim W. wrote:
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It's not much of a theory because it depletes the IRA too early. The
idea is that you have an expected life span at each age so the
withdrawal for each year is the fraction corresponding to 1/expected
life span. If you are married and the spouse is the designated
beneficiary, the expected life span is longer because it is based on
when you both would die.

--
Ron

For one reason or another I have always thought the RMD Life Expectancy
Tables were constructed in such a way that it assured (assuming some
expected return rate) the distributions from the accounts affected by the
RMD would deplete the accounts the minute you passed away.
That doesn't seem to be the case.
So my question is "What is the theory behind the tables?"

JW