How do I get Inherited IRA RMD?

[disneysteve]

I've found a couple of calculators for figuring out the minimum I need to draw from my inherited IRA but when I fill them out, all they say is that no distribution is required in 2021. I know that but I want to know what to expect in 2022 when I do have to start taking distributions.


Help.

 

[38Chevy454]

Where is the Inherited IRA held? Vanguard, Fidelity, or All you should need to do is call and talk to someone in their IRA department.

With the new rules for inherited IRAs you only have to complete withdrawals by end of 10th year. There is no RMD for each year, although you can take it per RMD calculation for several years. In final year you will need to take all. Or maybe take 10% of original amount each year, although depending on investment returns you will still have larger final year 10 withdrawal. So if you want approx equal distributions, maybe take 15% of original amount each year. It's all your choice how you want to do it.

BTW, congratulations on the Inherited IRA and your relative who saved and provided you the amount.

 

[disneysteve]

It’s at Vanguard. Maybe I’ll give them a call.

I actually am one of the exceptions to the 10-year rule. I get to do it over my life expectancy which I think is 27 or 28 years. Over that period, investment returns become an even bigger factor. But I guess a very rough estimate for year one would be 1/27 of the starting balance.

 

[RunningBum]

One of the reasons they won't tell you what your RMD is in 2022 is that it depends on your balance on 12/31/2021. They can probably tell you whether it's based on 1/27 or 1/28 but you won't get a $ amount.

 

[SecondCor521]

Vanguard has an RMD service where you can set it up to make all the calculations, take out the required amount (monthly, and maybe annually as well), withhold for federal taxes, and put the money into a taxable Vanguard account (or maybe your checking account).

My Dad has done this for a while now; 1/12th of his RMD comes out monthly on the 15th, they take out X% for federal withholding, and put the rest in his taxable Vanguard account. He could set up an auto ACH withdrawal from there to his checking if he wanted to.

They recalculate it every year for him and everything is on autopilot. Except of course we have to keep an eye on the withholding % so that it is appropriate for his tax situation.

 

[tulak]

I’ve had an inherited IRA at Vanguard for years and they calculate my RMDs every year. I’ve never had to call them and do it all through their website.

 

[Bruno]

Yes most companys will figure it and sent cash to you but if you are just wanting to see what i would be in the future i have used this one.

https://www.schwab.com/ira/understand-iras/ira-calculators/rmd

 

[RetireBy90]

IRS Worksheet for RMDs are at link below. Simple 3 line worksheet with the longevity table.

https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf

 

[bingybear]

from whom are you inheriting and age difference are the are they from you? While this doesn't affect the first year rmd it may effect the number years you have to take the distributions. You may be subject to the secure act

 

[skipro33]

IRS Worksheet for RMDs are at link below. Simple 3 line worksheet with the longevity table.

https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf

I clicky your link, but comes back 'page not found'.

 

[ERD50]

I clicky your link, but comes back 'page not found'.

remove the comma at the end (the forum software hides it)

WRONG:

"https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf,"

CORRECT: https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf


-ERD50

 

[MissMolly]

I clicky your link, but comes back 'page not found'.

When you click on the link and the address shows in your address bar, take off the comma at the very end and then it works.

LOL ERD beat me to it.

 

[cathy63]

It’s at Vanguard. Maybe I’ll give them a call.

I actually am one of the exceptions to the 10-year rule. I get to do it over my life expectancy which I think is 27 or 28 years. Over that period, investment returns become an even bigger factor. But I guess a very rough estimate for year one would be 1/27 of the starting balance.

I will assume:
- the decedent passed in 2021
- you are a non-spouse beneficiary
- you are not more than 10 years younger than the decedent
- the decedent had not already reached an age where RMDs were required

If any of these assumptions are incorrect, then please update with the accurate info. If RMDs were already in effect, or the person who died was your spouse, then the calculations are different.

In 2022, you will use the updated Single Life Expectancy Table to look up your life expectancy. You will then divide the balance of the inherited IRA on 12/31/2021 by your life expectancy from the chart. You'll have to estimate what you think the balance will be on 12/31.

In 2023 and subsequent years, you will subtract 1 from the previous year's divisor and use that number as the new divisor. You will not use the table to look up a new life expectancy after the first year.

The Single Life Expectancy Table that will be in effect in 2022 is in this document, starting on page 6. https://www.govinfo.gov/content/pkg/FR-2020-11-12/pdf/2020-24723.pdf Any online calculator you use for 2021 is using the older tables, so it's best to look up the number yourself and do your own math.

 

[cathy63]

IRS Worksheet for RMDs are at link below. Simple 3 line worksheet with the longevity table.

https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf

I clicky your link, but comes back 'page not found'.

remove the comma at the end (the forum software hides it)

WRONG:

"https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf,"

CORRECT: https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf

-ERD50

When you click on the link and the address shows in your address bar, take off the comma at the very end and then it works.

LOL ERD beat me to it.

This worksheet is probably not relevant for disneysteve's situation. It's for calculating an RMD from your own IRA. For a non-spousal inherited IRA, the process is the same, but the table of divisors is different.

 

[disneysteve]

I will assume:
- the decedent passed in 2021
- you are a non-spouse beneficiary
- you are not more than 10 years younger than the decedent
- the decedent had not already reached an age where RMDs were required

All correct.

In 2022, you will use the updated Single Life Expectancy Table to look up your life expectancy. You will then divide the balance of the inherited IRA on 12/31/2021 by your life expectancy from the chart. You'll have to estimate what you think the balance will be on 12/31.

In 2023 and subsequent years, you will subtract 1 from the previous year's divisor and use that number as the new divisor. You will not use the table to look up a new life expectancy after the first year.

The Single Life Expectancy Table that will be in effect in 2022 is in this document, starting on page 6. https://www.govinfo.gov/content/pkg/FR-2020-11-12/pdf/2020-24723.pdf

Thank you! Exactly what I needed. So in 2022, I'll be 58. According to that chart, my life expectancy is 28.9 (so now I know how long I need my money to last ). So balance on 12/31/21 divided by 28.9 is the amount I'll have to take in 2022. Let's say it's $560,000. That would be $19,377.

I realize the exact amount can't be known until year end but at least that gives me a solid estimate.

Thanks again.

 

[target2019]

I'm not the go-to source, but I think the decedent must have taken their RMD in 2021, otherwise it's on those who inherit.