little confused on the RMD inherited IRA tables
We have both tables for regular RMD’s and inherited (beny) RMD’s.
If you follow the beny tables, the companies always say that the tables are wrong and you have to:
1. use the bene’s date of birth in the year after the death of the owner and subtract 1 for each subsequent year.
2. So who are the tables for, just a surviving spouse, but if that is so, they would transfer the IRA to their own IRA.
thank you
Douglas
Permalink Submitted by Alan - IRA critic on Tue, 2022-04-12 23:00
The single life table for beneficiaries is used in a number of ways. The most common is when the RMD is based on the age of the beneficiary in the year following the year of death and that divisor is then reduced by 1.0 for each year thereafter. For a sole spousal beneficiary who maintains the IRA as inherited, the only difference is that the table is entered every year instead of reducing the initial divisor by 1.0. The table is also used by estates, non qualified trusts, and individual beneficiaries who are older than the decedent when death is after the RBD, but based on the age of the decedent in the year of death (instead of age of beneficiary )with that divisor then reduced by 1.0 each year. Therefore, depending on the beneficiary the table might have to be entered every year, and depending on the beneficiary that applies, the age of the decedent with the 1.0 reduction would apply instead of the age of the beneficiary.
On top of all that, starting with 2022 RMDs, the initial divisor must be reset to the divisor that would have applied using the new tables to arrive at the 2022 and later divisors, with the 1.0 reduction still applying each year to that new initial divisor.
And yes, the new Regs are much more complex than before the Secure Act, but the general use of the single life table has not changed. It still applies only to beneficiaries, but in different ways.
Permalink Submitted by Douglas Bauerband on Wed, 2022-04-13 15:57
Is this correct:Owner died in 2015Bene was 53 in 2016Single life expectancy is 33.4 for a 53year old using the new tables 2022-2016=6years 33.4-6= 27.4” or is this: You don’t subtract the 1 from the 1st year when he was 53. You start subtracting the 1 from age 54 to 58. (54, 55, 56, 57 and 58 = 5yrs) 33.4 – 5 = 28.4
Permalink Submitted by Alan - IRA critic on Wed, 2022-04-13 16:37
The correct 2022 divisor is 27.4. Initial 2016 new table divisor is 33.4 (age 53). This comes directly from the table and is not reduced by 1.0. 33.4 is first reduced by 1.0 for 2017 and thereafter. 6 years have passed since 2016 (2017-2022) resulting in 27.4 divisor. Even though RMDs were waived in 2020, the divisor was still reduced by 1.0 for 2020 even though the RMD was not distributed.