Daughter inherits 403B from father. RMD options?
Daughter inherits 403B from her father who was 69 years old when he died in July 2011. Daughter has NOT taken any withdrawals. He would turn 70 1/2 this month. What are her options to satisfy RMD requirements? 5 year total distribution? RMD’s base on deceased father’s life expectancy? Can she rollover to an inherited IRA and then take RMD’s based on her life expectancy?
Permalink Submitted by Alan - IRA critic on Mon, 2013-08-19 16:21
Daughter should have taken a 2012 RMD based on her own life expectancy unless the 403b was one of the few such plans that requires the 5 year rule to apply. In that case the entire balance would have to be withdrawn no later than 12/31/16. She can transfer the balance to an inherited IRA or inherited Roth IRA, but since this was not done by 12/31/2012, the RMD requirements of the 403b plan would apply to the inherited IRA. Daughter should check why the plan did not advise her of her 2012 RMD requirement, as this might be an indication that the plan requires the 5 year rule to apply. Otherwise, she could restore her stretch by taking out the missing RMD and paying the 50% penalty for the delinquent 2012 RMD. Father’s remaining life expectancy does not apply to this situation.