Beneficiary IRA Stretch

Submitted by Janis Sleeter on Tue, 2023-02-28 20:14

1) I have a client whose mom died in August 2021.
Mom had taken her RMD for 2021.
Are there any quidelines or suggestions on how to spread this out over the remaining years of the 10 after mom’s death?
2) Just double checking, I have a client whose brother died last December at the age of 64. Client is RMD age.
Does she get the 10 year cliff?



Submitted by Alan - IRA critic on Tue, 2023-02-28 20:38

  1. First client will need to take annual RMDs in years 1-9 of the 10 year rule, although the IRS has waived the penalty for the 2022 RMD if she did not take it. While the annual RMDs are a requirement starting this year, they typically will not spread the income equally, leaving a larger amount for year 10 (2031). If client will benefit by avoiding the larger distribution in year 10, the RMD can be exceeded to spread the income equally over the remaining years.
  2. No. Since client 2 is an EDB due to not being more than 10 years younger than deceased brother, annual beneficiary RMDs will be required, but the 10 year rule will not apply. Therefore there is no concern over avoiding a large distribution down the line. Client must keep the RMDs separate between the inherited IRA and any IRA they own.


Submitted by Janis Sleeter on Thu, 2023-03-02 17:54

Do we use the single life table starting with her age for 2022 and deduct 1 year for 2023 calculation and then just deduct 1 year for each year until 10 and then cleanout the balance?



Submitted by Alan - IRA critic on Thu, 2023-03-02 18:55

  • If owner passed in 2022, the beneficiary age in 2023 is used to get the single life table divisor. The 1.0 reductions start in 2024 and beyond.
  • For client 1 (owner passed in 2021), use beneficiary age in 2022 for initial divisor, then reduce 1.0 for each year thereafter.


Submitted by Janis Sleeter on Wed, 2023-03-01 17:45

Confirming that client 2 starts taking RMD’s this year based on the Uniform Lifetime Table and her age by year-end of 76. Factor for 2023 would be 23.7. Then deduct 1 from the factor every year there after



Submitted by Alan - IRA critic on Wed, 2023-03-01 18:06

  • Beneficiaries cannot use the Uniform table. Client  2 must take a 2023 beneficiary RMD using the single life table with age 76. The divisor is 14.1 for 2023, then reduced by 1.0 for each year thereafter. 
  • While not usually beneficial, because the IRA owner passed prior to RBD, client 2 does have the option to opt OUT of EDB treatment and into the 10 year rule per the proposed Secure Act Regs. That would eliminate the annual RMDs, but the inherited IRA would have to be drained by the end of 2032. That’s 5 years sooner than staying with the EDB stretch. If this option is selected, the IRA custodian should be notified by the end of this year, so there is time to consider this option. Usually, this option is not beneficial.


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