Spousal beneficiary
Husband dies. He was 55 when he died. Spouse is 49 years old and is the sole primary beneficiary. I understand she may elect to either stay on as a beneficiary or exercise spousal rollover. If she stays as a beneficiary, would she have to take RMD every year once she starts? Since she can defer RMD until 12/31 of the year when her husband would turn 70-1/2, can she take RMD in only the years when she needs money? ❓
Permalink Submitted by Alan Spross on Mon, 2007-11-05 04:35
If she maintains her beneficiary interest, she does not have an RMD requirement until the year her deceased spouse would have reached 70.5. However, if she takes a distribution before that, it is not considered an RMD and does not set any precedent. It would also be penalty free, and that’s the benefit of not assuming the IRA, at least until she is 59.5.
She should also name her successor beneficiary ASAP. That successor beneficiary would be treated as a designated beneficiary for RMDs (receive the stretch) if the surviving spouse passes prior to her first RMD year.
Permalink Submitted by [email protected] on Mon, 2007-11-05 17:27
Thank you for the clarification, Alan.