RMD’s for non-spouse beneficiaries
Was just reading the July newsletter.
Sounds a lot like the old rule where you started with the beneficiary’s age and single life table factor for year one and subtracted one each year following. But you have to take out any balance remaining by 10 years after the date of death.
Is this correct?
I am trying to clarify how we calculate things when the parent died in 2020 for example and we are just starting to take RMD’s this year. For 2023, should we use the factory for the beneficiary age in 2021 and deduct 2? and just have a “big” final distribution in year 10?
Appreciate your help.
Permalink Submitted by Alan - IRA critic on Fri, 2023-06-23 21:17
Yes, basically correct subject to certain special case exceptions. While this beneficiary will not be penalized for not taking the 2021 and 2022 RMD in years 1 and 2 of the 10 year rule, it is expected that the Regs will be finalized and the 2023 RMD will be required. Use the new 2022 RMD tables to determine the correct divisor for 2023. Finally, these annual RMD will likely still leave a large amount in the plan in year 10, therefore the beneficiary might want to take out more than the annual RMD to equalize the taxable amounts through the end of the distribution period.