SECURE 2.0 and spousal benes

Submitted by Robert Vashko on Mon, 2023-02-06 16:24

Was re-reading Sec. 327 of SECURE 2.0 – i.e., allowing a spousal bene to assume and now also adopt the age of the deceased spouse.

Even though this does not go into effect until 2024, I am wondering – is the age adjustment only available to spousal benes who inherit in 2023 and later?

Or can an existing spousal bene (say, one who inherited and assumed ownership years ago, and is in RMD phase) elect the age adjustment in 2024 – thus halting their RMDs until the dead spouse would have hit RBD, and then the RMDs are calc’d on the dead spouse’s L.E.?



Submitted by Alan - IRA critic on Tue, 2023-02-07 02:01

  • The intent of Sec 327 is to provide the same options for sole spousal beneficiaries as they have with inherited IRAs. The text appears to allow these sole beneficiary spouses to make the election after 2023 regardless of when they inherited the plan.
  • The text of Sec 327 modifies the existing code under which beneficiary distributions are not required until the deceased participant would have reached 72 or the newer applicable age to allow the spouse beneficiary to elect to be treated as the owner and use the Uniform table with their own age since they are now treated as the employee. 
  • If an IRA spousal beneficiary age 75 assumes ownership before the deceased spouse would have been 72,  they must calculate RMDs using their own age and forfeit delaying RMDs until the deceased spouse would have reached 72. With the Sec 327 verbiage it is difficult to determine whether the spousal beneficiary for these same ages would have to start ownership RMDs or could hold off until the deceased spouse would have reached 72. That would make the RMD provisions somewhat better for qualified plans. Otherwise the qualified plan rules would be the same as the IRA rules. 

Add new comment

Log in or register to post comments