deferral election
I want to confirm whether a deferral election is or is not required.
Decedent was 59 and died in Nov 2024, Surviving Spouse is 54.
Spouse inherits decedents union retirement plan and rolls distribution into an inherited IRA.
Spouse is the only beneficiary.
I want to confirm that the spouse would not need to make a deferral election.
Page 211 in Ed’s book seems to say the election is required, although other resources say the election is required only if there are multiple beneficiaries.
Thank you
Permalink Submitted by Alan - IRA critic on Fri, 2025-05-09 15:36
I think you are referring to an election to assume total ownership of the inherited IRA.
If the spouse was the sole beneficiary, there is no annual beneficiary RMD until the deceased spouse would have reached age 75. Because the surviving spouse is still under 59.5 they should wait until they reach age 59.5 and then elect to assume ownership of the inherited IRA, after which RMDs will not start until the surviving spouse reaches 75.
Prior to 59.5, if distributions are needed from the inherited IRA they will be penalty free. But after 59.5 the surviving spouse should elect to assume ownership and if distributions are needed there will be no penalty, just ordinary taxes on the distributions.