Inherited 401k to Inherited IRA and RMD
All assets are pre-tax. The beneficiary is the parent and the son did not reach RBD before passing. Is it correct that the father who is over RMD age, does not need to distribute RMD’s but still must deplete in 10 years?
Permalink Submitted by Alan - IRA critic on Fri, 2023-08-18 17:47
Father is an EDB (not more than 10 years younger than son) and therefore not subject to the 10 year rule, but would have to take annual RMDs based on his single life expectancy. Or the father has the option to OPT OUT of EDB treatment and into the 10 year rule. If he did that annual RMDs would not be required but it would shorten the combined distribution period for father and father’s beneficiary, since father’s beneficiary would have to adhere to father’s 10 years instead of getting a new 10 year period as the beneficiary would do if father retained EDB status. Therefore, father has a decision to make regarding EDB v the 10 year rule. The deadline to opt out of EDB treatment is 12/31 of the year following the year of son’s death.