Starting RMD through 401k

Submitted by Wendy Mommaerts on Wed, 2018-05-02 14:58

What are the rules regarding a 401k plan…

Owner begins RMD while funds are in a 401k: can they use the Uniform table

Inherited 401k – spouse – if spouse leaves at 401k:

Inherited 401k – non-spouse and left at 401k: do they have to follow the 5yr rule

Are there any special rules to consider?

Permalink Submitted by Alan - IRA critic on Wed, 2018-05-02 15:38

For owner of 401k – the Uniform Table applies unless the owner is married to a spouse more than 10 years younger, and then Table II (Joint Life) table applies.
If a sole surviving spouse inherits owner’s 401k, table I (single life table) applies with recalculation (table needs to be entered each year). Surviving spouse can reduce those RMDs and protect the stretch for their own beneficiaries by rolling the inherited 401k into their own IRA.
A non spouse beneficiary of a 401k must use the single life table whether they retain the inherited 401k or do a direct rollover to an inherited IRA or inherited Roth IRA. The 5 year rule can only apply if the 401k owner passed prior to the RBD. If owner passed after the RBD, table 1 (life expectancy) applies. If by chance the non spouse beneficiary is OLDER THAN the 401k owner, the owner’s remaining table I life expectancy applies. This is rare, but would apply to a 401k left to a parent or older sibling.