Most people will use the IRS Uniform Lifetime Table for calculating required minimum distributions (RMDs) from their IRAs after age 70-1/2. However, when someone’s sole IRA beneficiary is a spouse who is more than 10 years younger, seniors can use the joint life expectancy tables found in IRS publication 590, which covers IRAs. Often, that will lead to smaller RMDs and more tax deferral.
Say Walt Carter is 71. His wife Sally, age 56, is his IRA beneficiary. On the Uniform Lifetime Table, a 71-year-old has a "distribution period" for that year’s RMD of 26.5 years. Thus, most 71-year-olds must withdraw at least 1/26.5 of their IRA balance that year: at least $3,774 from a $100,000 IRA.
Walt is more than 10 years older than Sally, though, so he can use the joint life expectancy tables. For a couple aged 71 and 56, the joint life expectancy is 30.9 years. Thus, Walt can withdraw as little as 1/30.9 of his IRA balance this year: $3,236 from a $100,000 IRA, or $538 less than most people his age. More can be left in Walt’s IRA, to grow tax-deferred.
Seniors who have a much younger spouse as IRA beneficiary may have to do the math and request the smaller RMD. Not all IRA custodians will calculate RMDs using joint life expectancies, where that’s permitted.
