Spousal IRA
In the case of a person who is 60 and his wife is 45- This particular person has a concern that he may pass in the next ten years max….not completely unfounded. The problem as we see it here is that his wife will still only be 55. How does she access the IRA at that point since she is still under 59 1/2? Can it be done without doing a 72T distribution setup? Thanks very much
Permalink Submitted by Alan - IRA critic on Fri, 2022-09-09 18:13
If the surviving spouse is under 59.5 and there is any possibility that she will need funds from the inherited IRA prior to 59.5, she should maintain the IRA as beneficiary rather than rolling it over as her distributions will be penalty free. Upon reaching 59.5 she can then do the spousal rollover. While still a beneficiary IRA she would have to begin RMDs once client would have reached 72.
Permalink Submitted by Matthew Morea on Mon, 2022-09-12 15:12
So that’s really interesting…you’re saying that in this case the surviving spouse- who is under 59 1/2 can actually roll the Deceased Spouse’s IRA into a Beneficiary IRA? Even though she is married to him? Just want to make sure im clear on this.
Permalink Submitted by Alan - IRA critic on Mon, 2022-09-12 15:24
Yes, that’s correct. It will allow her to take penalty free distributions if needed. Her beneficiary RMDs would not begin until the year he would have reached 72, and that is prior to her reaching 59.5 by a couple years. Therefore, there would be a couple years of beneficiary RMDs due before she does the spousal rollover at 59.5, which would stop the RMDs. They would not begin again until she reached 72.
Permalink Submitted by Matthew Morea on Mon, 2022-09-12 16:46
Great info thanks. Do you by any chance have a reference link that i could read further? Thanks
Permalink Submitted by Alan - IRA critic on Mon, 2022-09-12 17:47