From 24/7 Wall St. · David Beren · · 1m 40s
Her Husband Is 11 Years Younger, IRS Asks for Smaller RMD
Her husband is 11 years younger than her, and because his name is the only one on her beneficiary form, the IRS calculates a smaller required minimum distribution every year than her neighbor with the same balance.
In brief
Her husband is 11 years younger than her, and because his name is the only one on her beneficiary form, the IRS calculates a smaller required minimum distribution every year than her neighbor with the same balance. A spouse listed as sole beneficiary on retirement accounts with a spouse 11+ years younger can get a…
RMDs Change With Beneficiary Form
A single line on a beneficiary form changes how the IRS calculates required minimum distributions for retirement accounts.
Spouse 11 Years Younger Gets Smaller RMD
If your spouse is more than 10 years younger than you and listed as sole beneficiary, the IRS calculates a smaller annual RMD than neighbors with identical balances.
Why the IRS Uses Different Tables
The IRS uses the Uniform Lifetime Table by default for most accounts, but switches to the Joint Life and Last Survivor Table when a spouse is the sole beneficiary.
Joint Life Table Benefits
Using the Joint Life and Last Survivor Table lowers the required withdrawal amount because a younger spouse stretches the joint life expectancy.
How to Qualify for Smaller RMD
To qualify, your spouse must be the sole primary beneficiary at 100% for the entire calendar year with no children or trusts listed as primary beneficiaries.
Trusts Disqualify the Benefit
Naming a trust as primary beneficiary, even if the trust's sole beneficiary is your spouse, generally disqualifies the account from the alternate table.
How to Fix the Beneficiary Form
Move children, grandchildren, or trusts to the contingent line and confirm your spouse is listed as sole primary beneficiary at 100%.
What it means
A spouse listed as sole beneficiary on retirement accounts with a spouse 11+ years younger can get a smaller annual RMD than neighbors with identical balances.
