Spousal IRA Beneficiary
A male client age 74 with $500,000 in his IRA receiving RMD’s passed away this year 2015. Wife age 68 has $250,000 in her IRA. The spouse beneficiary was told to keep the two IRA’s separate, not sure why. Seems to me it is in her best interest to consolidate into her IRA and avoid RMD’s until age 70 1/2. Please advise. Thanks
Permalink Submitted by Alan - IRA critic on Thu, 2015-07-09 16:59
Yes, at these ages there is no benefit for her to maintain a beneficiary IRA, so she should roll it over to her IRA. If she has some reason to keep it in a separate IRA account, it should be a separate owned IRA. She would then have two IRA accounts, both owned. She also must complete the RMD for her husband for 2015 if he did not complete it, and then she would have a couple years before her own RMDs must begin.
Permalink Submitted by Ben Meyer on Fri, 2015-07-10 06:26
Wouldn’t another advantage be that she would use Table III after reaching 70 1/2, which provides a lower payout than Table I as a beneficiary? (Independent of the effect of her lower age.)