At Least as Rapidly Rule
Is there any instance where this rule would be interpreted as forcing a non-eligible designated beneficiary to have to empty their account in less than 10 years OR to have to take larger RMDs in years 1-9 than what would be indicated by using the single life table corresponding to their age?
For example:
Mike dies in 2022 at age 80 and leaves his $300,000 IRA to his son, Joe, age 50. Assume the IRA always stays at $300,000 for the sake of simplicity,
Mike’s RMD in the year he died was $14,851 ($300,000/20.2)
Joe’s 1st year RMD would be $8,287 ($300,000/36.2) His 2nd and following years RMDs would use a divisor of 35.2, 34.2 33.2 and so on. Correct? And by 12-31 of year 10, he has to empty the account completely.
Does the “At Least as Rapidly” Rule in any way modify the above and force Joe to take out “at least” $14,851 per year or somehow make him empty the account in less than 10 years?
Thanks!!
Permalink Submitted by Alan - IRA critic on Sat, 2022-08-20 03:57
“At least as rapidly” refers to the concept that if the owner was taking RMDs, the beneficiary must continue RMDs, but can use their own LE and Table I instead of III, except when it is shorter than the owner’s and then they can use the owner’s age but with Table I. In your example the beneficiary’s own LE is longer than the owner’s, but that is OK. Joe’s LE RMDs would be as you indicated, with an annual 1.0 divisor reduction. The dollar amount of Mike’s RMDs is immaterial.