Life Expectancy Method
Definition of 'Life Expectancy Method'
A method of calculating annuity payments, by dividing the balance or total value of a retirement account by the policy holder's anticipated length of life. This is the easiest method of early distribution to calculate.
There are two types of life expectancy methods. One is the "certain method", and the other the "recalculation method". IRS tables help determine life expectancy of the owner or the joint life expectancies of the owner and a beneficiary.
Investopedia explains 'Life Expectancy Method'
An example of how this method is calculated: If a 54-year-old single man wants distributions to begin in 2011, he must first calculate the total account value as of