Clarification of Secure’s “10 Year Rule”

Submitted by Jonathan WERNER on Thu, 2022-12-08 21:42

I am a non-spouse beneficiary of a TIRA (from my mother who passed in July 2021), and I have received conflicting advice from the TIRA custodian and my accountant regarding how long I have to deplete the TIRA under the SECURE “10 year Rule”.

My accountant says I need to distribute everything from the TIRA by December 31, 2030, which reflects 10 years worth of distributions (I took my first distribution in December 2021 the year she died ).

Conversely, my TIRA custodian says I need to distribute everything from the TIRA by December 31, 2031, which they consider to be the year of the 10th anniversary of my mom’s death. My accountant strongly disagrees because he says this would allow me to actually spread out my distributions across 11 tax years (by taking a withdrawal in the year my mom died plus a distribution every year until the year of the 10th anniversary of her death). My accountant says this is not allowed.

Any advice to set the record straight would be very much appreciated!



Submitted by Alan - IRA critic on Thu, 2022-12-08 23:36

  • Believe your IRA custodian in this case. Your 10 year rule ends on 12/31/2031 because the 10 years starts on 1/1/2022. The year of mother’s death is not one of the 10 years. 
  • Your distribution in 2021 does allow you to spread your distributions over 11 calendar years. In addition, if your mother was taking RMDs in 2021 but did not complete her 2021 RMD, you were responsible for completing it, and your distribution would have been applied to that requirement if you were responsible for completing her RMD for 2021.
  • Another issue is whether you will need to take annual RMDs based on your life expectancy in years 1-9. This is only required if mother passed after her required beginning date which is 4/1 of the year following the year she would have reached 72. If she passed before that you have no annual RMD requirements, but might want to take annual distributions anyway to spread the tax liability over more years.

Submitted by Robert Gibb on Fri, 2022-12-09 14:51

Are there any changes or amendments to the SECURE Act affecting non-spousal beneficiaries who would  have to take out annual withdrawals instead of allowing them to defer until the end of the 10th year?

Submitted by Alan - IRA critic on Fri, 2022-12-09 17:15

Yes, you are asking about EDBs who are not subject to the 10 year rule.  One such new requirement applies when the beneficiary is older than the decedent and therefore an EDB. If decedent passes after RBD, and beneficiary uses the longer LE of the decedent to determine the annual RMDs, then both lives need to be tracked because the year in which the beneficiary’s divisor drops to 1.0 or less will cause the inherited IRA to be drained, even though there were more years left using the decedent’s LE. In short, use of decedent’s LE reduces RMDs until the beneficiary’s life requires a full distribution. The Secure Act is tough on beneficiaries older than the decedent. Also, much of the increased complexity for designated beneficiaries carries through to successor beneficiaries when they inherit upon death of the designated beneficiary.

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