Beneficiary Required Minimum Distributions (RMD) - Spouse Inherited IRA
Beneficiary Required Minimum Distributions (RMD) - Spouse Inherited IRA Definitions
- Calculation notes
- This calculator follows the SECURE Act of 2019 Required Minimum Distribution (RMD) rules. The SECURE Act of 2019 changed the age that RMDs must begin and for certain beneficiaries how they must be withdrawn. For account owners born after 6/30/1949 RMDs are required to start when they turn 72. Account owners born on 6/30/1949 or earlier continue to use 70 1/2. For a spouse who chooses to not treat the an inherited IRA as their own, the SECURE Act did not change how the RMD is calculated; it only changed the age that they start. These rules took effect January 1st, 2020.
The CARES Act of 2020 provided a temporary waiver of RMDs. The RMD waiver is for retirement plans and accounts for 2020. This includes direct contribution plans such as 401k, 403b, 457b plans and IRAs. RMDs are also waived for IRA owners who turned 70 1/2 in 2019 and were required to take an RMD by April 1, 2020 and have not yet done so.
If you have RMD questions, please consult with your own tax advisor regarding your specific situation. If you are under 75 and this RMD is from a 403(b) plan, you may not be required to take distributions on the balance in your account before 1987 until you reach age 75. You may need to contact a financial planner or CPA to determine if this exception applies to your RMD.
IMPORTANT! This calculator has been updated for the SECURE Act of 2019 and the CARES Act of 2020. The IRS, however, has not yet released procedures for their implementation. Future IRS published procedures may have an impact on enforcement and interpretation of these Acts.
- Life expectancy calculations
- Life expectancy is determined using the Single Life Expectancy table and the spouse beneficiary's age on December 31st of the year following the owner's death or the year that the original account owner would have attained age 72 (or 70 1/2 if born before 7/1/1949) whichever is later. In all future years, the remaining life expectancy is 'recalculated' each year based on the spouse beneficiary's age as of December 31st of each calendar year.
Another option a spouse beneficiary can elect is to take an inherited account and treat it as his or her own. In this case, no distributions are required until the year in which the spouse reaches age 72 (or 70 1/2 if born before 7/1/1949). When distributions do begin, the spouse can use the Uniform Lifetime Table, which produces longer life expectancies than the Single Life Expectancy table, to determine the applicable life expectancy. In addition, a spouse is able to 'recalculate' or lookup a new life expectancy from the Uniform Lifetime Table each year. This produces the lowest RMD in all but the most unusual situations. This calculator will always assume that a spouse does not wish to treat an inherited IRA as their own.
- Beneficiary's name
- Please enter the account beneficiary's name.
- Beneficiary's birthdate
- Please enter the account beneficiary's birthdate.
- Name of account
- Please enter the name of the account for this analysis.
- Hypothetical Interest rate
- This is the expected rate of return on your account. This is only used to help project your future account balances (which of course will impact your required minimum distribution). The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2020, had an annual compounded rate of return of 13.8%, including reinvestment of dividends. From January 1, 1971 to December 31st 2020, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.8% (source: www.spglobal.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
- Amount Subject to RMD
- Mutual fund accounts use the previous year-end value. Variable annuity contracts use the actuarial year-end contract value, which may include living and death benefits, when determining the RMD amount. For variable annuity contracts, contact the issuing company for this information.
- Date of the original account owner's death
- Please enter the date of the original account owner's death.
- Plan type
- Please enter the plan type. The plan type can affect distributions if the account owner is younger than the beneficiary and RMDs have already begun.
- Original account owner's birth date
- Please enter the original account owner's birth date.