Surviving Spouse May Have a Hypothetical RMD

The IRS in the final SECURE Act regulations retains the hypothetical RMD requirements in certain situations

Photo by Tyler Delgado on Unsplash

The SECURE Act passed in late 2019 introduced a limit on the number of years that a person inheriting an IRA (or other pension plan) could stretch the payments. Before SECURE, a person could stretch the payments out over their lifetime based on a factor from a table.

However, SECURE, for most inheritors has placed a limit of 10 years which means the account has to be fully depleted by the 10th year after the person died.

This rule normally does not apply to surviving spouses, but if the surviving spouse is nearing their required beginning date of age 73 (75 starting in 2033), then they may be subject to a hypothetical RMD. The original 2022 Proposed Regulations introduced this concept, and the 2024 Final Regulations adopted the same rule.

What does this mean?