Ask The Hammer: How Should Owners of Inherited IRAs Use The New Lifetime RMD Tables?

Key Takeaways

• Non-spouse beneficiaries using the 'stretch' method must look up the Single Life Expectancy Table only once in the year after inheriting, then subtract one each year—not recalculate annually like IRA owners do
• When new IRS lifetime tables took effect, beneficiaries must retroactively apply them to their original inheritance year calculation, then subtract the years elapsed since—making it more complex than simply looking up your current age
• Many custodians won't calculate inherited IRA RMDs for beneficiaries because they don't know the inheritance date and fear liability; you must verify calculations yourself with a CPA or financial advisor
• Missing RMD distributions on inherited IRAs carries a severe 50% penalty on the shortfall amount—not 15% or 25%—making verification essential to avoid losing half of inherited money
• Spouse beneficiaries can roll inherited IRAs into their own and delay RMDs; minor children, disabled individuals, and chronically ill people also get stretch exceptions, but most other non-spouse beneficiaries face the 10-year distribution deadline under SECURE Act rules