Beneficiary IRA – life expectancy RMD
I received a beneficiary traditional IRA in 2011 after my mother (age 81) passed away in January of that year. Since she died after the RBD I had the 2 choices of either continuing distributions or doing the total distribution.
I did not want to do the total distribution at that time, so that left me with the ‘continuing distributions’ option. (However, what I really would have liked to have done was the 5-year payment but apparently was only available if my mother had died before the RBD.)
I took the mandatory distribution for that year and the RMD (actually have been taking out more than the RMD)in each of the last two years. It was a relatively small IRA (19K) to begin with so I didn’t really want to stretch it out. Does the ‘continuing distributions’ option based on life expectancy prevent me from depleting the account before a certain point in time?
Permalink Submitted by Alan - IRA critic on Sat, 2013-10-12 17:05
Unfortuneately, you received incorrect advice back then. If you were named directly on the IRA as beneficiary you could take distributions over your life expectancy or ANY amount in excess each year. In other words, even though the 5 year rule itself does not apply here, you could still have taken out 20% each year for 5 years. You can take out any amount you wish to including a full distribution as long as you take out AT LEAST your annual RMD amount each year until the account is exhausted.