401(k) beneficiary – RMD rules
Our client died at age 84 in 2024. His spouse, age 61, is the sole 401(k) plan beneficiary. In 2024, she completed the 401(k) RMD for her late spouse and transferred the balance to a inherited 401(k) in her name. Vanguard advised her that the inherited 401(k) has a 2025 RMD is based on her life expectancy. It’s a significant amount of money.
If our client completes a spousal rollover of the inherited 401(k) to a Traditional IRA in her name in 2025, will the 2025 RMD still be required?
Thank you!
Permalink Submitted by Alan - IRA critic on Mon, 2025-08-25 11:26
Yes, the 2025 beneficiary RMD is still required whether a direct rollover to an IRA is done or not. But her IRA RMDs will not start until the year she reaches 75.
Good chance that the RMD VG is quoting is too high. Under Secure 2.0 Sec 327, the sole surviving spouse beneficiary can notify the plan that they are electing to be treated as the participant for RMD purposes. That results in the beneficiary RMD for 2025 to be calculated using the Uniform Table instead of the single life table and is based on the age that she will attain on her birthday in 2025. Accordingly, the IRS has published a Uniform Table that starts at age 10 instead of 70 something. That divisor is 37.7 if she will be 61 this year, and 36.8 if she will be 62. These divisors reduce the beneficiary RMD to only around 2.7% of the 12/31/2024 401k value.
This election should be made ASAP before VG distributes a single life table RMD.
Permalink Submitted by Jeanette LoPiccolo on Mon, 2025-08-25 12:25
Are you referring to this Uniform table?
(Joint and Last Survivor Life Expectancy)
(For Use by Owners Whose Spouses Are More Than 10 Years Younger and Are the Sole Beneficiaries of Their IRAs)
For 2025, for attained ages 85 & 61, I see a divisor of 26.6. If I am using the wrong table, please let me know.
Permalink Submitted by Alan - IRA critic on Mon, 2025-08-25 13:48
No, the joint life table is not the Uniform Table. The joint life table can only be used when both spouses are still living.
The Uniform Table is the one that applies to owners, but due to Secure 2.0, it also now applies to sole spouse beneficiaries of plans if they make the election and notify the plan administrator.
You probably cannot locate this table because the IRS has only published it in the proposed Sec 327 Regs issued on 7/19/2024 and I cannot find it elsewhere even with AI driven searches. And I cannot post links on this site. You might google “7/19/2024 IRS proposed rule” and in the list that you get click on “Federal Register” RMDs date 7/19/2024.
Since this revised Uniform Table is so far to find, it may not be possible to get VG to recognize it. Should they insist on distributing an amount from the single life table for her age, it would include more than the allowed RMD and she could roll over the excess to her IRA to reduce the taxable amount to that of the proposed Uniform Table.
Permalink Submitted by Alan - IRA critic on Mon, 2025-08-25 14:59
You could also access this table by a search for “IRS Notice 2022-6”. The table is included at the end of that Notice.
Permalink Submitted by Jeanette LoPiccolo on Mon, 2025-08-25 15:55
Found it! Thank you very much Alan!