IRS 2022 LE Table Update for RMDs, LE/72(t) calculations

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evilanne

evilanne

Well-known member
I think this deserves its own thread.
exnavyew said:
Good News for Retirees: RMD Formula Changing for First Time in Decades
Click to expand...
exnavyew said:
https://finance.yahoo.com/news/good-news-retirees-rmd-formula-213101624.html.
Click to expand...

Called TSP today and asked that they elevate issue as they are not using the correct tables for 2022 (Life Expectancy (LE payment/72(t) rules) but I didn't have the specific reference and couldn't find anything from a government website other than the proposed regulation https://www.federalregister.gov/documents/2020/11/12/2020-24723/updated-life-expectancy-and-distribution-period-tables-used-for-purposes-of-determining-minimum#p-73 while on the phone. So in doing research I found the following references:



I just finished submitting a looooong Message in TSP’s Message Center with these 3 references. Not sure if I will get any more reliable or quicker response here than by calling in but it is less frustrating and easier to document this way. I did get a response within a day to a much simple issue about 5 years ago. Per the website, they are supposed to reply within 2 business days. I will check back next Wednesday.

If you are subject to LE payments or RMDs and want the lessor amount based on the new tables taken out of TSP this year, I suggest you contact TSP https://www.tsp.gov/contact/ to express your concern about them using the updated tables for calculating the amount. For those in my situation, using the wrong table could result in 10% early withdrawal penalties. Since the new factor decrease your payments ~6 to 9% (Mid 50s to early 60s) don't be shocked if your payment decreases substantially at some point later this year if they take corrective action (they will have to reduce future payments by any overpayments already made unless there is some type of waiver or exception) .

To use the Message Center, log into your TSP account, select Message Center (left column), Messages (second tab) & Compose Message (left orange rectangle).

Happy Trails
 
I noticed my January RMD was more money than it should have been. Called and was told TSP was using 2021 RMD tables, not the 2022 tables for 2022 because they received the changeover too late to make the change. Found that hard to believe in this day of computers. So what I can do is make the change for Feb. I got several stories about what to do to change my RMD to what it should be. So what I did was to stop my Installment Payments, was told could do this and restart. But then another rep said cannot do that, once you stop installment payments in the year you are receiving them, you cannot restart until next yr. But I stopped Installment Payments based on what one prior rep told me. Then another rep said cannot do that. Once you stop installment payments cannot restart for the year. So now I have to take a fixed dollar amount for rest of 2022. What I was told by another rep was beginning of Feb. was to restart with a specific dollar amount. So taking the over payment that I received in January, deducting that from my proper 2022 RMD and them divide that balance by 11 months left in 2022. So that's what I was told to do, to use 2022 table for my age. Have to wait till beginning Feb. to do this otherwise if done at end of Jan., I would get another payment in Jan. resulting in two Jan. payments or 13 payments for 2022. And I put everything into the G fund end of Dec. Little did I know what would happen beginning of Jan. Retired CSRS LE mandatory end of 2000. Only had approx. 13 yrs with TSP since it's start. I did not switch over to FERS from CSRS when the changeover was made in middle 80's. My experience in calling three different ISP centers is mixed.
 
The only problem with the RMDs is that if they don't change to the 2022 Table and you adjust it as you have, they will automatically send you a check in December to make up the difference based on what they have posted on TSP.gov website. They really need to fix the problem or there will be many irate participants.

They had over a year to fix it since final rule was issue in November 2020; the proposed regulation was posted November 8, 2019 (see 84 FR 60812). They had a proposed table included in the proposed regulation and only made slight changes with the final. Executive Order 13847,83 FR 45321, which was signed on August 31, 2018, directs the Secretary of the Treasury to examine the life expectancy and distribution period tables in the regulations. So they had over 2-3 years to anticipate & plan for the change.
 
Surprises happen sometimes. I got a call from TSP today due to my call on Friday. I was on the phone for about 45 minutes with a nice young lady.

Started out with her explaining to me how the correction was correct and me explaining that they were using the wrong factors. She was referencing 5 CFR 1650.13, which is what they are using for guidance. Some highlights from our discussion.
--IRS told them they only needed to change the RMD table (late December). I question whether or not they were asking the right questions
--Me explaining and then finally reading from the IRS' Final Regulation
--The FRTIB made the decision not to change anything on the Single Life Table (at least for now) but they will be using the updated one for 2023.
--She said that you could go in and change to a fixed payment, I explained why that doing so would create more issues but we really should have option to use the updated table this year.

Just checked TSP Message, no new message yet but they did receive it. They are aware of the issue and it looks like those getting RMDs should be OK withdrawing based on the updated Table.
 
I think I did get a response but got sidetracked with other things earlier this year. Now it is probably forever lost with their new website roll out. II got a reduced LE payment on Friday...need to call them this week
 
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