Non-spouse RMDs

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Eliott
Posts: 2
Joined: Tue Jul 12, 2011 11:06 am

Non-spouse RMDs

Post by Eliott » Tue Jul 12, 2011 11:25 am

Hello Jim,

As a non-spouse beneficiary of a 457 plan, the IRS requires me to withdraw annual RMDs over my "lifetime" even though I haven't reached 70. But the lifetime they assume is a fictional number that forces ever-increasing withdrawals as time goes on. For the purposes of the FRP, I've just pretended the amount is cash, earning CD rates. Can I get more accuracy by telling the program I am 70 years old, extending my life expectancy and other age-dependent values by the offset in age, and checking the RMD box under "settings"? Or, do the non-spouse RMDs have unique payout rules that would not be covered by "tricking the program?"

Many thanks for your great generosity in providing this tool and support for it. It continues to be very helpful.

Eliott

jimr
Posts: 557
Joined: Thu Feb 28, 2008 6:48 pm

Re: Non-spouse RMDs

Post by jimr » Tue Jul 12, 2011 7:59 pm

Hi Eliott,

Thanks for writing about the planner. Unfortunately, your question is a way beyond my understanding of the rules for RMDs. If you're looking for help with the details of how the RMDs work, you might try posting a question at bogleheads.org in the "help" forum. There are several knowledgeable folks that hang out there and they may be able to answer you question.

Once you know the particulars of the rules for the RMDs you need to take, maybe I can help you capture the details in the planner in a way that makes sense.

Regards,

Jim

Eliott
Posts: 2
Joined: Tue Jul 12, 2011 11:06 am

Re: Non-spouse RMDs

Post by Eliott » Wed Jul 13, 2011 12:22 pm

Jim, thanks for responding so quickly. This is what I've come up with so far:

Here's a link to a website that shows the percentage RMD distribution required per year for non-spouse beneficiaries of IRAs, which apparently applies to 457s as well:
http://www.moneymanagment.info/Table%20V.htm

But the life expectancies shown do NOT match the current IRS table, appendix C for Single Life Expectancy: http://www.irs.gov/pub/irs-pdf/p590.pdf

However, here's an online calculator that does match the current IRS table, but doesn't show the percentages used (and I can't force the IRA yield to "0" in order to glean those percentages).

http://www.hughchou.org/calc/mrd.cgi

I would like to find a current table with percentages, if it exists. I've sent e-mails of inquiry to sort this out and will keep you posted.

Eliott

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