RMD’s When a Spouse in more than 10 years younger
I have clients where he is 71 (9/13/43) and she is 61 (2/2/54). My questions is- he started taking RMD’s last year and based the RMD on the uniform table can he now switch to the joint life table if this is more beneficial?
Permalink Submitted by Jose Morales on Tue, 2015-02-10 16:35
The Uniform Lifetime Table assumes a spouse beneficiary of exactly 10 years younger, so the factor you would find in the scenario you presented would be exactly the same regardless of whether the client uses the Uniform Lifetime Table or Joint Life (26.5). Please also take into consideration that the requirements for using the Joint Life Table are that the spouse is also the sole primary beneficiary, not just that they be more than 10 years younger.
Permalink Submitted by David Mertz on Tue, 2015-02-10 23:18
These spouses appear to be 11 years apart, not 10. The ages to be used used in Table II are the spouse’s ages on their repective birthdays in the same calendar year. In 2015, he will be 72 while she is 61. So Table II will produce a slightly higher divisor (26.3) than will Table III (25.6).
Permalink Submitted by Alan - IRA critic on Wed, 2015-02-11 00:14
DMx is correct. With respect to the original question then, he can switch this year to Table II as long as spouse is the sole beneficiary of the IRA. The effect of using the Uniform Table in 2014 is just that he took out a little more than he needed to. If he took the 2014 RMD between 12/13 and year end 2014, he could roll the excess back (60 days), but the difference may not be enough to warrant doing that. The limit on rollovers also needs to be considered.