Surviving Spouse RMD 457(b)
A client of mine has a 457(b) account from her spouse who is a deceased state employee. She rolled the account into her name. The plan administrator is calculating her RMD using the single life table, she is currently 84 and her spouse was a year older. My question is since she rolled this into her name under the plan, should the TPA use the Uniform Life Table? My assumption was if she moved the account into her name as opposed to leaving under her spouses name then RMDs would calculated using uniform life table.
Thanks for any guidance,
Don
Permalink Submitted by Alan Spross on Thu, 2012-01-05 22:10
She had the account re titled in beneficiary form, with her as the beneficiary but NOT the owner. That is why the single life table is being used for her RMDs instead of the Uniform Table.
She should roll the plan over to an IRA, which she would actually own. This would reduce RMDs because she could then use the Uniform Table which is based on the joint life expectancy of the owner and an assumed spouse 10 years younger.
Any individual beneficiary that she chooses to name would also get a new stretch upon her death if she rolled the plan to her own IRA. If they inherit the 457b plan, they will just be successor beneficiaries and will have a very limited number of years over which to take RMDs.