inherited IRA from Uncle
Client inherited IRA from Uncle many years ago.
One of the companies we have her in, continues to take her Uncle’s age and her age and come up with a double RMD. They say that is from the IRS rules.
She is 84 this year with 20k left in the contract. Her inherited RMD factor would be 8.1, which would mean that her RMD amount would be $2,469.
The company is telling us the RMD is $4,917. Her Uncle was born 8-16-57 and date of birth was 4-1-2011.
Question:
1. Am I correct on what the RMD should be by using the factor of 8.1 for 84 years old and the $2469 (ending value: $21638.67)
or…
2. Are they correct is what ever factor they are using to come up with the $4917 (ending value: $21638.67) ?
3. if I am correct, would you please send me the link to IRS rules as they said they are not going to change it since they are following IRS rules?
Thank you very much,
Douglas
Permalink Submitted by Alan - IRA critic on Tue, 2021-10-05 19:52
Their figure is correct. SInce uncle passed prior to his RBD, she cannot use his age for her beneficiary RMDs. She must use her own age attained in 2012 (age 75) for her initial divisor, then reduce the divisor by 1 each year thereafter which develops a 2021 divisor of 4.4. Their dollar RMD indication is correct. Your divisor of 8.1 came from entering the table for age 84, instead of using the 1.0 reduction for 9 years.