Ask the Hammer – How Should Owners of Inherited IRAs Utilize The New Lifetime RMD Tables?
How Should Owners of Inherited IRAs Utilize The New IRS Lifetime Required Minimum Distribution (RMD) Tables? The Hammer explains.
Key Takeaways
- For non-spouse beneficiaries using the stretch method, consult the Single Life Expectancy Table only once in the year after inheritance, then subtract 1 each subsequent year—do not look up the table annually like account owners do
- The IRS released updated life expectancy tables reflecting longer lifespans; beneficiaries must retroactively apply these new tables to their original inheritance year, then subtract the number of years that have passed since then
- Custodians are not required to calculate inherited IRA RMDs and many refuse to do so; you are ultimately liable for correct distributions, so verify calculations with your CPA or financial advisor to avoid a 50% penalty on shortfalls
- Two beneficiaries of the same age can have different RMDs based on when they inherited—someone who inherited 15 years ago must take out more than someone who inherited 2 years ago because of how the stretch method compounds distributions over time
Ask the Hammer - How Should Owners of Inherited IRAs Utilize The New Lifetime RMD Tables? In this episode of Ask The Hammer, Jeffrey explains how owners of Inherited IRAs should utilize the New Lifetime RMD Tables. Watch more episodes of Ask The Hammer at this link: https://www.finstream.tv/videos/ask-the-hammer/
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