Question

Terrance is age 71 and retired. Beginning in 2018, he must start taking minimum distributions from his IRA account that had a balance of $140,000 as of December 31, 2017. Make these three assumptions: his IRA will earn 9% per year; he will withdraw the minimum distribution on the last day of each calendar year, and only one distribution will be taken in 2018. Calculate the amount of his distribution for years 2018 through 2022 and the ending balance in his IRA account on December 31, 2022. Use Table I, Table III and Table V. (Do not round "Applicable Life Expectancy" answers. Round other answers to nearest whole dollar value. Use these answers in subsequent computations.) (2) . 13 . (5) Year (4) (1) IRA Balance At End of Prior Year Applicable Life Expectancy Required Distribution IRA Earnings Ending Balance 2018 2019 2020 2021 2022

Answer 1

Answer:

Using recalculation method
Year	IRA balance at end of prior year	Applicable life expectancy	Required distribution	IRA earnings @ 9%	Ending balance
2018	140,000	26.50	5,283.02	12,600	147,316.98
2019	147,316.98	25.60	5,754.57	13,258.53	154,820.94
2020	154,820.94	24.70	6,268.05	13,933.88	162,486.77
2021	162,486.77	23.80	6,827.18	14,623.81	170,283.40
2022	170,283.40	22.90	7,435.96	15,325.51	178,172.95
Using certain method
Year	IRA balance at end of prior year	Applicable life expectancy	Required distribution	IRA earnings @ 9%	Ending balance
2018	140,000	26.50	5,283.02	12,600	147,316.98
2019	147,316.98	25.50	5,777.14	13,258.53	154,798.37
2020	154,798.37	24.50	6,318.30	13,931.85	162,411.92
2021	162,411.92	23.50	6,911.15	14,617.07	170,117.84
2022	170,117.84	22.50	7,560.79	15,310.61	177,867.66