Required Minimum Distributions and Beneficiary Planning Flashcards

A surviving spouse inherits an IRA and elects spousal rollover treatment. What is the earliest the spouse must begin taking RMDs from the rolled-over account?

Answer: April 1 following the year the surviving spouse turns 73

When a surviving spouse rolls over an inherited IRA into their own IRA, RMDs are governed by the spouse's own age—beginning April 1 following the year they turn 73 under SECURE 2.0.

Which of the following describes the 'separate account' rule relevant to multiple IRA beneficiaries?

Answer: Each beneficiary must create separate accounts by December 31 of the year following the IRA owner's death to use their own life expectancy

Beneficiaries who establish separate inherited IRA accounts by December 31 of the year after the owner's death may each use their own life expectancy for RMD calculations.

An IRA owner names a see-through trust as beneficiary. What is the maximum distribution period available to the trust beneficiaries under SECURE Act rules if the trust's oldest beneficiary is a 50-year-old adult child?

Answer: 10 years from the IRA owner's death

Adult children named as trust beneficiaries are non-eligible designated beneficiaries, so the 10-year rule applies rather than the life expectancy stretch.

What is the 'required beginning date' (RBD) for a non-5%-owner participant in an employer-sponsored qualified plan who is still employed?

Answer: April 1 following the later of the year they turn 73 or the year they retire

Non-5%-owner active employees may defer plan RMDs until April 1 following the later of age 73 or the year of actual retirement.

A client converts a traditional IRA to a Roth IRA in 2025. How does this affect the current year's RMD obligation on the traditional IRA?

Answer: The RMD must be taken before the conversion; it cannot be rolled over or converted

An RMD cannot be converted to a Roth IRA; the owner must first satisfy the traditional IRA RMD for the year, and only remaining funds may be converted.

Which strategy allows a surviving spouse who is younger than the deceased IRA owner to delay RMDs as long as possible after inheriting the IRA?

Answer: Elect inherited IRA treatment and postpone distributions until the deceased owner would have turned 73

A younger surviving spouse can elect inherited (not own) IRA treatment, which allows deferral of RMDs until the deceased owner would have reached their required beginning date—potentially delaying distributions further than a spousal rollover.

Under the SECURE 2.0 Act, Roth accounts in employer-sponsored plans (e.g., Roth 401(k)) are now treated how with respect to lifetime RMDs?

Answer: Roth 401(k) accounts are exempt from lifetime RMDs beginning in 2024, matching Roth IRA treatment

SECURE 2.0 eliminated lifetime RMDs for Roth accounts in employer plans effective 2024, aligning them with Roth IRA rules.