Which Rule Applies for an Inherited IRA Beneficiary?
I have a client with a unique situation. First, her husband (who is deceased as of 2018) inherited an IRA from his cousin back in 2014 (the cousin was 61 at her time of death in 2014). The husband began taking distributions RMDs in 2015 based on his life expectancy. He named his wife (my client) as the sole beneficiary of this inherited IRA. Upon his death in 2018, she began taking RMD’s based on the life expectancy of the original beneficiary (i.e., her husband who’s DOB was 10/29/1942). First, do the RMD rules in force in 2018 still apply or are they superseded by the SECURE Act? My firm has calculated an RMD for 2025 of roughly 16% of the account value. I don’t think this is correct. I would like to get the group’s input on this.
Thank you!
Greg Dorriety
Permalink Submitted by Alan - IRA critic on Thu, 2025-09-25 10:52
Your firm appears to be correct.
Since there have no beneficiary deaths post Secure Act, the original stretch rules continue to apply. Client is correct by continuing to use the RMD schedule that her husband was using, with the only adjustment being to reflect the change in RMD tables in 2022. Therefore, the 2025 RMD divisor is based on the new table divisor for husband’s age in 2015 (16.4), reduced 1.0 for each year since. That results in a total reduction of 10.0 for a 2025 divisor of 6.4.