RMD to a younger spouse beneficiary

[Below Ground]

Having read a number of posts on this topic, I find myself still confused. Any help would be greatly appreciated.

Business owner is well over 70.5. Has been taking RMD for a few years. He dies. Spouse is only 60. She is the sole beneficiary.

From what I have read she must continue on with RMDs, but using the factor for her age.

It also seems that she can rollover the monies in the same plan (she is in the same plan with the owner), but she must take RMDs from her rollover account.

Lastly, what is the impact of rollong to an IRA?

[Lou S.]

I believe she can rollover to an inherited IRA and continue RMDs from there.

[GMK]

If she rolls it over to her own account in the plan or to her own IRA, she will not have to take RMD's until her Required Beginning Date under the plan or IRA.

As Lou S. said, she can roll it to an inherited IRA and will then have to take RMD's each year (after the year the owner died), based on her age on her birthday each year, using the Single Life Table.

Also, if the owner did not take enough taxable distributions to satisfy his RMD for the year he died, the spouse will have to take a taxable distribution (before the rollover), to satisfy the owner's RMD for the year the owner died.

[GMK]

I found this related article interesting, although it's mainly for when the spouse is under age 59-1/2:

http://www.theslottreport.com/2014/07/what-younger-spouse-should-do-when.html

[david rigby]

If she rolls it over to her own account in the plan or to her own IRA, she will not have to take RMD's until her Required Beginning Date under the plan or IRA.

Note that "it" refers to a distribution of the account balance, not to the RMD.

[Below Ground]

Thanks to all. GMK, do I read this right in that if she rolls to her own account under the Plan, RMDs before she is 70.5 are not needed? I was under the impression that she must continue RMDs using the factor for her age. As noted, she is a little over 60; almost 61. She is the Owner's spouse and she is also a participant under the same Plan as an employee of the firm.

Owner did take full RMD before he died in 2014, so nothing more for 2014 is due.

Thanks for clarification Mr. Rigby.

[GMK]

The surviving spouse gets special treatment. She can avoid RMD's until after she is 70-1/2.

Non-spouse beneficiaries can roll the benefit, but only to an inherited IRA, so they get to keep taking RMD's.

These charts are helpful (to me, anyway):

http://www.mhco.com/BreakingNews/ABene_Chart1_110813.html

http://www.mhco.com/BreakingNews/ABene_Chart2_110813.html

[Below Ground]

Thank you very, very much.

[GMK]

Check the plan doc for whether participants have an option to use the 5-year rule or life expectancy, or whether the plan doc specifies which applies to what circumstances.

Check your files for a summer-like avatar. It'll be cold enough soon enough around here that we don't need reminding.