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Maintenance Update 9 30 2022


Overview:

The Sept. 30th update for 2022 is limited to minor fixes, enhancements and ADA refinements (except for the 72T calculators listed below). This update is optional, unless you have received instructions from us. All updates are cumulative, by skipping this limited update any changes to your package will be included in the next update release. To view the previous update package please see Calculator Update 6/30/2022.


Update instructions:

  1. Download the latest version of your calculator update from your download site, found on your update e-mail notice.
  2. Run the update package (KJEUpdate.exe). This is a self-extracting zip file. (Or unzip the KJEUpdate.zip file if you are using a non-windows platform.)
  3. When prompted for a directory, you may use the default or enter your own. It is recommended that you extract the update to a new directory and then move the required files to your production environment. One directory will be created with no subdirectories.
  4. Copy the new files to your current deployment, replacing files with identical files names with the new ones.

If you wish, you can download the full calculator package from the same location, and refresh all files provided by KJE for your calculators. This package includes any site specific changes done for you by KJE, but will not include any customizations by you or your web-developers. Please contact us if you have questions regarding this new update package.


Master Changes (affects all calculators):

  1. Default Mortgage Rates Increased: All mortgage calculators have new default rates, increased to reflect current conditions. Note that if you have previously used a calculator, you may need to reset the calcualtor to default to see the new rates. The new default rates are as follows:
    1. Default Rate for Fixed 15-year term : 6.00
    2. Default Rate for Fixed 30-year term : 6.50
    3. Default Rate for Adjustable rate : 5.00

  2. ADA and Screen Readers: Continued improvement ADA and screen reader functionality are included in this update to meet or exceed accessibility specification WCAG 2.1 Level AA and Section 508.
  3. CSS and Layout refinement: Numerous fine-tuning adjustments to the V3 core deployment. This includes refinements to fonts, display and mobile device compatibility improvements.


Calculator specific updates:

  1. 72(t) Calculaor: Early withdrawals from retirement accounts (Retire72T.html, Retire72T2.html), 72(t) Distributions: Impact on retirement fund balances (Retire72TAlt.html): The Federal Mid-Term rate has been updated for October 2022. This change affects the calculators default values and the definition of Reasonable Interest Rate For October 2022. For October 2022, 120% of the Federal Mid-Term rate is 3.94%.

    The calculator includes the previously implemented udpated to include the new rules that allow for any rate under 5% to be used, instead of only looking at the 120% rate. The maximum is the higher of 5% or 120% of the Federal Mid-term rate.

    The definition now reads:

    Distribution interest rate

    In January of 2022, Notice 2022-6 specified a change to what is considered an acceptable interest rate when calculating distributions. Previously the rule set the maximum rate at 120% of the Federal Mid-Term rate for either of the two months immediately preceding the month in which the distribution begins. The new rule now sets a new maximum of 5% or 120% of the Federal Mid-Term rate -- whichever is higher. This essentially makes 5% the new maximum until Federal Mid-Term rates increase significantly.

    For October 2022, 120% of the Federal Mid-Term rate is 3.94%.

    It is important to note that the associated law that created 72(t)/(q) distributions did not define what was to be considered a reasonable interest rate. As such, the guidance from the IRS generally flows from the concept that they will not allow people to circumvent the requirement of substantially equal periodic payments (SEPP) throughout your lifetime by using an unreasonably high interest rate.

  2. 1040 Tax Calculator (Tax1040.html): Updates to definitions for better clarity of tax rules. No changes to the input or calculations have been affected by this change.
  3. Definition 10-Year rule for beneficiary RMDs (RetireBeneficiary.html, RMDOwnerStretch.html, RetireBeneficiaryCurrent.html, RMDBeneficiaryFuture.html): The calculation definition and notes on the report have been expanded to discuss the proposed change to the 10-year rule for beneficiary RMD distribtutions. The new language below has been added for these calculators. It is expected the proposed rule will be finalized by the end of the year (which could included additional changes). These will be updated at that time to cover the new rules.

    Defintion and report text for new 10-year proposed rule

    A proposed rule for the SECURE Act was released on February 23, 2022. When finalized the new rule will change the way the RMDs are treated for non-spouse Designated Beneficiaries that use the SECURE Act 10-year rule for distributions. It is likely this new rule will be retroactive to all of 2022. Originally the required distributions under the 10-year rule required all funds to be withdrawn end of the year in which includes the 10th anniversary of the account owner's death without regard to RMDs.

    The proposed rule requires a beneficiary to withdraw an RMD for year 1 through 9 if the original account owner had already begun taking RMDs themselves. The remainder would then be required to be withdrawn in its entirety in year 10. Note that year's 1 through 9 have a required minimum distribution, any amount over the minimum is acceptable and will not incur penalties.

    As of 9/30/2022 the proposed rule has not been finalized. Our current calculator illustrates evenly distributing distributions over a 10-year period when the 10-year rule applies. This will exceed the RMD requirement in all but a few circumstances. The RMD may not be sufficient if the applicable remaining life expectancy of the beneficiary is less than 10 years. It is strongly advised you seek professional guidance in all RMDs and especially with beneficiary RMDs. -->