In this scenario, J has elected the maximum deferral period consistent with the required beginning date
for minimum distributions.
For Roth IRAs, the IRA owner is treated as having died before the individual's required beginning date
It is important to note that the election must be made by the required beginning date
, and once chosen it is irrevocable.
For each calendar year, beginning with the required beginning date
, the minimum distribution is calculated by dividing the December 31 account balance (from the preceding year) by the remaining life expectancy of the account owner or, in some cases, the joint life expectancy of the owner and the designated beneficiary.
The Required Beginning Date
(RBD) is April 1 of the year after the taxpayer attains age 70.
They repeal the prior rule that taxpayers designate a beneficiary by the required beginning date
Under the new proposed regulations, IRA owners can change beneficiaries after the required beginning date
generally without affecting the MRD or the ability for beneficiaries to "stretch" the IRA.
The designated beneficiary is determined as of the owner's required beginning date
(RBD) for taking distributions--April 1 of the year after the year in which the owner turns age 70 1/2.
Previously, IRS proposed regulations concerning beneficiary selection and required minimum distributions (RMDs) made it necessary for pre-retirees and retirees to make certain decisions by their required beginning date
(RBD)(2), concerning passing retirement savings on to their beneficiaries.
This allows: the employee to change designated beneficiaries after the required beginning date
without increasing the RMD; and the beneficiary to be changed after the employee's death, such as a beneficiary disclaiming or cashing out.
The two sets of minimum distribution rules stipulate a required beginning date
(RBD) for distributions.
An employee's entire interest will be distributed not later than the required beginning date