RBD/MRD Confusion
I have an IRA distribution client with a post-June 30 birth date and don’t understand the distribution advice provided by her money manager – frankly I’m lost in the details. Expert advice on this simple issue would be greatly appreciated.
Client was born in September, 1938, so she will be age 70 at the end of calendar 2008 with an IRA value of $X; she will be age 71 at the end of calendar 2009 with an IRA value of $Y; she will be age 72 at the end of calendar 2010 with an IRA value of $Z. Her spouse continues to work and will be at his RBD upon retirement. They are in a very high income tax bracket and will remain so upon his retirement. Client qualifies for distributions prescribed by the Uniform Lifetime Table.
What is her RBD? What is the timing and calculation for her MRDs?
Permalink Submitted by Al Fry on Tue, 2008-06-03 16:00
Since she is 70.5 in 2009, her RBD is 4/1/2010. But her first distribution year is 2009. So the calce would be the age 71 divisor (26.5) into the 2008 12/31/2008 balance, whether she takes it in 2009 or 2010. Then the 2010 RMD would be 25.6 (age 72 divisor) into the 12/31/2009 balance, and must be taken out by 12/31/2010.
Permalink Submitted by Alan Spross on Tue, 2008-06-03 19:37
Typo: Age 71 divisor = 26.5