A Safer Retirement and Environment – What We’re Implementing to Help Keep You Safe: READ MORE

Here at Chadmere Capital Inurance and Financial Services, we are adhering to state and local guidelines in order to protect both the health and safety of clients and staff. Keeping our clients and staff safe is our highest priority and we’re taking all appropriate measures to ensure a safe environment. Should you prefer to not meet face-to-face, we are continuing to serve our clients through virtual settings such as Zoom or phone calls.

We look forward to continuing to help individuals and families achieve their ideal retirements.

Chademere Capital Insurance and Financial Services
(803) 242-1050

CLOSE

INHERITED IRAS AND RMDS: TODAY’S SLOTT REPORT MAILBAG

By Andy Ives, CFP®, AIF®
IRA Analyst
Follow Us on Twitter: @theslottreport

Question:

Greetings,

If I have the beneficiaries on my IRA listed as my wife (50%) and two children over 21 (50%), is my wife still able to move her half of the IRA into her existing IRA when I am gone?  Or does having the adult children as partial beneficiaries inhibit her ability to do a spousal rollover to combine it with her existing IRA?

Thank you.

Stephen

Answer:

Stephen,

As long as your IRA is timely split after your death, your wife will still be able to complete a spousal rollover into her own IRA. This is often referred to as “separate accounting.” The deadline for your beneficiaries to set up separate inherited IRA accounts is December 31 of the year after your year of death. If that happens, your wife can do a spousal rollover. However, if this deadline is missed, your wife would not be permitted to do a spousal rollover and would be required to maintain the account as an inherited IRA.

Question:

I hope you can help me, please! I just inherited an inherited IRA from my sister who had inherited the IRA from her fiancé. There were only 4 years difference in age between my sister and I, but I am unsure of the age of her deceased fiancé. How do I determine if I’m an Eligible Designated Beneficiary or just a Designated Beneficiary?  And whose age do I use to determine the RMD requirements?

Any help/direction you can provide would be greatly appreciated!

Liz

Answer:

Liz,

Since you are inheriting an inherited an IRA, that makes you a successor beneficiary. I will assume your sister was taking stretch required minimum distribution (RMD) payments from the inherited IRA based on her own single life expectancy. As a successor, you will continue this exact same RMD schedule, using the same RMD factor that your sister was using. Essentially, you will step into her shoes for future RMD payments. Additionally, since you are a successor beneficiary, the 10-year rule also applies. So, continue RMD payments in years 1 – 9, but the account must be emptied by the tenth year after the year your sister’s death.

https://www.irahelp.com/slottreport/inherited-iras-and-rmds-todays-slott-report-mailbag-2

Ready To Take

THE NEXT STEP?

 

For more information about any of our products and services, schedule a meeting today.

Or give us a call at (803) 242-1050

Investment advisory services offered through Foundations Investment Advisors, LLC (“Foundations”), an SEC registered investment adviser. Nothing on this website constitutes investment, legal or tax advice, nor that any performance data or any recommendation that any particular security, portfolio of securities, transaction, investment or planning strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of Foundations, execution of required documentation, and receipt of required disclosures. Investments in securities involve the risk of loss. Any past performance is no guarantee of future results. Advisory services are only offered to clients or prospective clients where Foundations and its advisors are properly licensed or exempted. For more information, please go to https://adviserinfo.sec.gov and search by our firm name or by our CRD #175083.

 ADV Part 2A & Form CRS              Privacy Policy