SECURE Act Eligible Designated Beneficiary wants to use the 10 year rule

Submitted by Kevin O'Hearn on Mon, 2021-02-08 20:45

Post SECURE Act, if a non-spouse beneficiary is an eligible designated beneficiary because they qualify under one of the exceptions (spouse, disabled, chronically ill, minor, not more than 10 years younger), I understand that they have the ability to still stretch RMDs out over their life expectancy. If the beneficiary chooses to, do they also still have the option of depleting within 10 years if they would prefer this method over taking life expectancy payments?



Submitted by Alan - IRA critic on Mon, 2021-02-08 22:05

There is no statement in the Secure Act that suggests that an EDB can opt out of life expectancy and into the 10 year rule. However, there is always the possibility that the IRS Regs yet to be issued regarding the Secure Act might permit such option.

Submitted by William Tuttle on Tue, 2021-02-09 13:24

Required Minimum Distributions are just that. Nothing prevents you from depleting the account in <= 10 years.
While you have to take RMDs, you can take additional distributions of any given amount (up to the balance) in any given year.
However, it is usually more tax advantageous to maximize the continued deferral by only taking RMDs.

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