Inherited IRA – Spousal beneficiary
T-IRA owner < 70.5 died in 2015
Surviving spouse, (younger then deceased) is sole beneficiary
Is there any benefit to remaining a beneficiary?
I wouldn’t think so since the surviving spouse is younger – hence he can defer RMDs till he turns 70.5
Assuming he remains a beneficiary – which RMD table is used? Whose life expectancy is used? beneficiary? deceased?
Thank you
Permalink Submitted by Alan - IRA critic on Tue, 2016-04-12 21:06
If the surviving spouse is under 59.5 and needs the IRA funds for living expenses, they should keep the IRA in inherited form until they reach 59.5 so they can withdraw without penalty. Note that if the surviving spouse maintains the IRA as inherited, they have no RMDs until the year the deceased spouse would have reached 70.5. Once they must begin RMDs as beneficiary, they use the single life table using their own age as of the end of the year for which the first RMD is due. As sole beneficiary they re enter Table I each year and do NOT reduce the prior divisor by 1.0 like a non spouse beneficiary must do. However, once beneficiary RMDs are due (decedent would have been 70.5), the IRA should be rolled over into the name of the survivor. That reduces the RMD and also allows the next beneficiary to get their own stretch when the surviving spouse passes.