What I find interesting is your Rd Slott quote suggests that the reset is mandatory, whereas Finance Buff wrote that it was permissive optional - “the IRS allows you a one-time reset in 2022”.
Sorry, I don’t have a regulation to cite, but since the table has been updated, using the new table with the rules for RMDs would change the amount. From that perspective, both sources are kind of correct. Because all of the tables were updated with (mostly) longer life expectancies for 2022, by using the calculations based the previous table, the amount taken out would generally be larger than the RMD based on the new table. For IRAs where an RMD is required, the IRS has always allowed you to take more than the RMD, so in that sense, the reset is ‘optional’. On the other hand, the true required amount to be distributed from inherited IRAs has been reset for 2022 to a new, lower requirement, just like the lower RMDs from all other IRAs. So in that sense, the RMD reduction is ‘mandatory’.
I will point out, for those whose IRAs have a significant allocation of stocks, it’s still likely that the dollar amount of the 2022 RMD will be higher than the RMD dollar amount was for 2021, given the increase in the stock market during 2021.
Given that the pandemic has actually lowered life expectancies https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8564739/ in the US, it will be interesting to see what happens when the IRS updates the tables again.
The Table update was initiated by Executive Order 13847 https://www.federalregister.gov/documents/2018/09/06/2018-19…
(d) Updating Life Expectancy and Distribution Period Tables for Purposes of Required Minimum Distribution Rules. Within 180 days of the date of this order, the Secretary of the Treasury shall, consistent with applicable law and the policy set forth in section 1 of this order, examine the life expectancy and distribution period tables in the regulations on required minimum distributions from retirement plans (67 Fed. Reg. 18988) and determine whether they should be updated to reflect current mortality data and whether such updates should be made annually or on another periodic basis.
When the regulations that included the new tables were published https://www.federalregister.gov/documents/2020/11/12/2020-24… they indicated that reviews would take place at least every 10 years:
These regulations do not provide for automatic updates to the life expectancy and distribution period tables. The Treasury Department and the IRS currently anticipate that they will review the tables at the earlier of: (1) 10 years or (2) whenever a new study of individual annuity mortality experience is published.
AJ