Deceased spouse 401(k) Rollover to Surviving Spouse IRA (not inherited IRA) – RMD Rules
We have a client who is 73 and her spouse died in 2021. We rolled his 401(k) over into a Trad IRA for her (not an inherited IRA). The deceased spouse was 62, not yet at RMD age.
Does she have to begin RMD’s for this year(2021)? If not, when?
Permalink Submitted by Alan - IRA critic on Wed, 2021-10-27 22:13
That might have been a mistake unless she needs distributions each year as is. Because the “spousal rollover” was done, she now owns the IRA and is RMD age, therefore she will be subject to IRA RMDs starting in 2022. Conversely, had she done a direct rollover to an inherited IRA, beneficiary RMDs would not start until the year deceased spouse would have reached 72. But if she needs to take distributions anyway over the next 10 years or would not have wanted to concentrate her RMDs in years after age 82, then this might not matter.
She has no RMD for 2021 as she had no IRA balance on 12/31/2020, and there is no year of death RMD from the 401k since he was not RMD age. Her own RMDs start in 2022 based on the IRA 12/31/2021 balance.
Since 2021 will be her last year of filing jointly with it’s lower marginal rates, and also is the final year without RMDs (unless she already had her own IRA), she might benefit by doing an incremental Roth conversion before year end, while determining how such conversion might affect her IRMAA situation in 2023.