SPOUSE BENEFICARY: HYPOTHETICAL RMD – EXAMPLE
01.Core Concepts
Marta, age 66 and Eli, age 67, were married 45 years when Eli died in 2024. Since Marta did not need additional income at the time of Eli’s death, she chose the 10-year distribution opt ion. Nine years later, in 2033, Marta decided to roll the account, currently worth $103,000, into an IRA in her own name to make tracking her retirement assets easier. SPOUSE BENEFICARY: DEEMED ELECTION TO BE TREATED AS EMPLOYEE - DEATH AFTER 2019, BEFORE RBD • Surviving spouse who is the sole beneficiary of a qualified plan is deemed to have elected to be treated as the employee (when participant dies prior to RBD) • Proposed regulations issued in July 2024 provide guidance • Qualified plan surviving spouse options are now similar to IRA surviving spouse options • Surviving spouse’s RMD will be determined using spouse’s own age and the Uniform Lifetime Table rather than the Single Life Table for RMD calculations • Result is a considerably longer life expectancy (than Single Life Table) which translates to a higher life expectancy factor and a lower required distribution amount.