What age to use in the Single Life Expectancy
According to Mr. Slott’s books the stretch is based on the projected life expectancy of a designated beneficiary according to his age the year after one dies. Is there a specific date that is used to determine this age? In the year after ones death the DB will have 2 ages – before and after the DB’s birthday. Can he use the younger age?
example: One dies on July 1, 2008. The designated beneficiaries birthday is May 1 (Age 30 )
In 2009 how does the DB determine which age to use in the Single life Expectancy table.
Does he use the age he is on the Date of death + 1 year (Age 31)
Since he will still be Age 30 until May 1, 2009, can he use this age in the table.
Thanks
Permalink Submitted by Alan Spross on Sat, 2010-04-03 22:17
No, he must use age 31, the age he would attain on his birthday in the year RMDs must begin. He cannot use the younger age. (Pub 590, p 37).
It does not matter at which point in the RMD year that he actually withdraws the RMD. A non spouse beneficiary then reduces the first divisor by 1.0 for each successive year. This is known as “non recalculation”. A spousal beneficiary goes to Table 1 each year and determines the divisor for the age they will attain at their birthday in that year. This is known as “recalculation” and produces a slower drawn down of the inherited IRA. What is being recalculated is the survivor’s longer life expectancy as a result of surviving each year after RMDs begin. A non spouse beneficiary does not get this advantage due to the 1.0 annual divisor reduction.