Starting RMD factor for pre-SECURE benes or post-SECURE EDBs

Submitted by Robert Vashko on Wed, 2020-09-16 14:01

I should really know the answer to this and/or write it down because I always forget:

Suppose we have a post-SECURE EDB (not more than 10 years younger) who is eligible for a lifetime stretch.

Decedent dies in 2020 when bene is age 63. Bene turns 64 before 12/31/20. Bene will be 65 when RMD is due at the end of 2021.

What Table I factor do you use for the first stretch RMD – 22.7 (correlating to age 63, the bene’s age when the IRA owner died), 21.8 (correlating to 64, the bene’s age on 12/31/20 when the first RMD’s account value base is determined); or 21.0 (the bene’s age when the RMD is actually due)?

Disclaimer – I know the life expectancy tables are going to be updated, but I’m just trying to figure out which factor associated with which age to use for the first RMD calc.

Please and thank you.



Submitted by Alan - IRA critic on Wed, 2020-09-16 15:52

For first beneficiary LE RMD due for 2021, the divisor will be 21.0 because the beneficiary will be 65 by the end of 2021. After that the divisor is reduced by 1.0 each year. As you know, if the IRS approves the new tables for 2021, the initial divisor will be slightly higher (lower RMD).

Submitted by Robert Vashko on Wed, 2020-09-16 16:39

Thanks.  So that is the rule of thumb – the first stretch RMD is always based off the bene’s age when the first RMD is due on 12/31/XX?

Submitted by Alan - IRA critic on Wed, 2020-09-16 19:05

Yes. However, if the beneficiary is using the decedent’s age (eg estate inherits IRA), the age of decedent at the end of the year of death must be determined, then that divisor is reduced by 1.0 for the first beneficiary RMD due in the year following the year of death. So if based on decedent, use year of death age and if based on the LE of beneficiary use the age in the year following the year of death to start.

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