401(k) Distribution
I named my wife and son each 50% beneficiaries of my 401(k). Question is – after my death will they use the Single Life Expectancy Table or the Uniform Lifetime Table to compute their distributions?
I named my wife and son each 50% beneficiaries of my 401(k). Question is – after my death will they use the Single Life Expectancy Table or the Uniform Lifetime Table to compute their distributions?
Permalink Submitted by Alan - IRA critic on Fri, 2017-08-25 00:52
They will both have to use the single life table for any RMD distributions directly from the 401k. However, your wife is able to do a direct rollover of her share to an IRA (either owned or inherited). If she is under 59.5, she will be better off with an inherited IRA until she is at least 59.5, but can then roll it over to her own IRA. Once the funds are in an owned IRA, she can begin using the Uniform Table for her RMDs under which the RMDs are considerably less than from the single life table. Your son in particular will have lower RMDs after a rollover to an inherited IRA for himself because if the 401k is left in place, the RMDs for both are determined by the oldest beneficiary of the two, which I assume is your wife.