New LE tables and BIRA’s
Rob is 62 and his spouse died 5 years ago when he was 56. He started taking RMD’s from her IRA as a Beneficiary IRA and started using Table 1 pub 590 for age 56, which is 28.7. He has reduced that each year by 1, so this year his divisor should be 22.7 based on current tables. However, in November of last year, it looks like LE tables changed and the LE factor for his start date is different. It is 30.6 at age 56. Should he continue his RMD’s based on the original table from which he started or does he recalculate based on the new 30.6 LE, which would add 1.9 to his LE and potentially reduce his RMD? Thanks for your help clarifying this.
Michael
Permalink Submitted by Alan - IRA critic on Tue, 2021-05-18 21:36
As a sole spousal beneficiary, his RMDs do not start until the year his spouse would have reached RMD age. Would need to know her DOB to determine which year that would be.
The new IRS RMD tables do not take effect until 2022. If Rob was required to take RMDs because his spouse was considerably older than him, his divisor will have to be reset in 2022 to determine the 2022 divisor. This would be done by determining what his divisor would have been had the new tables been used in his first RMD year. He would then subtract 1.0 from that divisor to determine the 2020 divisor. It is estimated that the new tables will reduce RMD by roughly 6% starting next year.
At his current age being over 59.5, he would typically do the spousal rollover her age was such that his own RMDs could be delayed beyond 72 if he kept the account as inherited. Again, her DOB is needed to determine which year his beneficiary RMDs would have to start.