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Spousal rollover, election to treat as their own, or inherited IRA calculations.
Plan Profile
- Calculation year The year the analysis begins.
- Dec. 31 balance The plan balance as of the year end prior to the calculation year.
- Expected plan growth The growth rate you’d like to use to estimate how the plan will grow in future years. This is for illustration purposes only. The calculation has to be made each year based on the actual previous year end value.
- Plan type The illustration is for either IRA or Roth IRA plans.
- Deceased owner’s date of birth The owner’s date of birth can affect when the required minimum distributions begin and the options available to beneficiaries.
- Owner’s year of death The year of death of the owner.
- Did the owner die prior to April 1? If the owner’s death occurs in the first quarter of the year after the year the owner reached RMD age, select “Yes”. This question will only be visible if death occurred in the year following the year the owner reached RMD age.
- Surviving spouse’s date of birth The spouse’s age and annual life expectancy will be used to calculate the distribution required.
Rollover or election to treat as own
- Was there a rollover or a spousal election to treat the IRA as their own? If the spouse has chosen to rollover and/or treat the IRA as their own or there is a “deemed election” to treat the IRA as their own, select “Yes”. A spouse must be the sole primary beneficiary in order to treat the IRA as their own. A deemed election to treat the IRA as their own may occur if the spouse is the sole beneficiary of the IRA and a contribution has been added to the IRA or any amount required to be distributed from an inherited IRA is not taken.
- Illustrate surviving spouse beneficiary’s death? Select “Yes” to illustrate the spouse beneficiary death and distributions to a non-spouse beneficiary.
- Illustrate 10-year rule for spouse? If a spouse beneficiary inherits an IRA prior to the deceased owner’s required beginning date and chooses an inherited IRA, they have the option of choosing the 10-year rule instead of a life expectancy payout. However, if they later choose to rollover to their own IRA, the “hypothetical RMDs†that would have applied had they not chosen the 10-year rule are not eligible for rollover.
- Enter non spouse beneficiary(ies) of the surviving spouse Up to five non spouse beneficiaries can be illustrated.
- Disabled or Chronically Ill For post 2019 deaths, beneficiaries who are disabled or chronically ill may take distributions over their life expectancy up to age 21. At age 21, life expectancy distributions must continue, and the 10-year rule applies.
- Legal Minor Child of Owner For post 2019 deaths, the IRA owner’s minor child may take distributions over their life expectancy up to the age of majority.
- Were separate inherited IRA accounts established for each beneficiary by Dec. 31 of the year after death? Enter “Yes” if separate inherited IRA accounts were established by the deadline. For each beneficiary to take distributions based on their own scenario, separate accounts need to be established by Dec 31 of the year after death. If separate accounts are not established by the deadline, distributions must be taken based on the beneficiary with the shortest payout.
- Illustrate 10 Year rule with equal payments with growth? For beneficiaries who are subject to the 10-year rule, distributions can be illustrated as equal payments over 10 years based on the expected growth rate entered.
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