Beneficiary IRA distribution options after Bene IRA owner dies
If I were to inherit an IRA today at 50 years old and chose to stretch using a divisor of 34.2 starting in 2018. If a IRA balance remains after I die what stretch options are available to my sole bene who is 25 today? Does he continue my factor until its zero or can he use a new factor for himself the year after my death?
Permalink Submitted by Alan - IRA critic on Wed, 2017-04-26 00:45
Your successor beneficiary must continue the divisors you would have used until the account is drained. This also applies to a successor beneficiary of your successor beneficiary if your successor beneficiary does not survive long enough for the inherited IRA to be drained. If you inherit the IRA this year and you are 50 at year end, your first RMD year will be 2018 and you will be 51 in 2018, so your initial divisor will be 33.3. For each year thereafter the divisor is reduced by 1.0, so this IRA will last around 34 years. You are also responsible for completing the year of death RMD (2017) for the IRA owner, if that owner passes on or after his required beginning date.