RMD calculation for 2021for inherited non spouse beneficiary
I’ve had an inherited IRA non spousal for years. The firm holding the IRA always says they cannot calculate the RMD amount. After much palaver, they reluctantly give me the figure. The amount given to me for 2021 seems wrong. I tried using an online calculator to determine 2021 RMD for inherited non-spousal beneficiary. I plugged in the required info, but was unable to come up with the same amount given to me. I need help.
Permalink Submitted by Alan - IRA critic on Wed, 2021-11-03 02:29
Inherited IRA RMD divisors can only be verified after tracing the entire history of the account. The following data is needed.
Did you inherit the IRA from the original IRA owner, or from someone who was already a beneficiary?
What year did that person pass, and did you inherit by being named directly as their beneficiary or did you inherit through an estate or trust?
Was there any other beneficiaries beside yourself? Individuals? If so, was your separate inherited IRA account established before the end of the year following the year that the IRA owner passed?
What was your age in the year after the year that person passed?
The custodian may not have known all this information, and could have made some incorrect assumptions.
Depending on your response, there could be more questions. Please advise.
Permalink Submitted by barbara rosen on Thu, 2021-11-04 00:24
Alan, I especially appreciate your easy-to-understand reply. (a) I inherited directly from original owner; (b) person passed 3/8/08; (c) no other beneficiaries; and (d) I became 69 in Aug. 2009.
Permalink Submitted by Alan - IRA critic on Thu, 2021-11-04 00:53
Your 2021 divisor would be 5.8. How does that compare to what you were given?
Permalink Submitted by barbara rosen on Thu, 2021-11-04 23:45
Hi Alan, a) My 2021 divisor has to be adjusted because of an error in the information I gave you. I became 70 in 2009 , the year after the original owner passed, not 69. I’m sorry for my carelessness.b) Used the 5.8 divisor to see what the 2021 RMD would be. It was @$1225 lower than the info given me. c) Could the difference be because the advisor has to be adjusted?
Permalink Submitted by Alan - IRA critic on Fri, 2021-11-05 02:25
With your age correction, the 2021 divisor changes to 5.0. That would increase your RMD.
Permalink Submitted by barbara rosen on Sat, 2021-11-06 23:34
Hi Alan,Using the 5.0 divisor, the increase in my RMD now matches the figure quoted by the financial company.Does the divisor change each year by a factor of 1, meaning the account will be depleted in four years?I am somewhat comforted that accounts for non-inherited RMDs use a different table.
Permalink Submitted by Alan - IRA critic on Sat, 2021-11-06 23:46
Yes, the factor will reduce by 1.0 each year going forward, and the account will be drained in 4 years, except for any gains that occurred in the 4th year, and those gains would have to be distributed in year 5 when the divisor would be 0.