Spousal Inherited IRA RMD

[Bill_Haverland]

My husband, who died in January, and I had separate IRA accounts. When my husband passed, he had not yet made the 2026 RMD based on his 12/31/25 IRA balance, but had received the advice from Vanguard as to the amount that he should pay. 

I am older than he was, so the RMD for my own IRA assets will be based on my age, i.e., a larger percentage.

My question is whether, when taking the RMD for 2024 (which I have not yet done), should the amount of the RMD be: a) The sum of the two amounts contained in our Vanguard notices? or b) Be recalculated on the entire value of both accounts at 12/31/24 based on my age alone? or c) Be only the amount that Vanguard advised for my own account (i.e. disregarding his RMD entirely during the year of his death)?

Please advise.

[Bill_Haverland]

Correction: This entire question relates to 2025 RMDs based on 12/31/2024 balances.

[Opus 17]

You have two options with a spousal IRA.

1. Treat it as yours.

2. Keep it as an inherited IRA. 

If you decide to treat it as yours, you can contact the trustee to designate yourself as the owner, or you can rollover the funds into your own IRA.  In either case, you must first take the owner's RMD for 2025 using the owner's formula, and you take your own RMD using your own formula.  Then, beginning in 2026, you calculate your RMD using the combined balances and your age.  you don't have to take the spouse's separate 2025 RMD.  Instead, you calculate your own 2025 RMD based on the combined balances, the same way you would if you had two IRAs at different banks under your own name.

If you decide to keep it as an inherited IRA, you must follow all the usual rules for inherited IRAs, which include:

a. Taking the original owner's RMD for the year they died if they did not already take it (using the calculation for the original owner).

b. You must withdraw all the funds and close the account within 10 years.

c. Starting the year after the original owner's death, you must take RMDs from this account, calculated separately from your own RMD, using the RMD formula for beneficiaries in publication 590-b (which is a slightly different calculation than taking your own RMD.)

If you don't take the beneficiary RMD by the end of 2026, the IRS will automatically determine that you are assuming ownership under your own name even if you don't contact the plan to make the change. 

[VolvoGirl]

He died in January 2025?  Yes you need to take his 2024 RMD this year 2025.  So you need to take his RMD and your RMD separately for 2024.  Then when my husband died in 2023 Vanguard moved his IRA into my  account so it's all under me now and I take the RMD as mine now  (well I actually start next year when I turn 73).  Has Vanguard put his account into yours yet?  You need to ask VG about doing that.    

[dmertz · Accepted solution]

You must complete his year-of-death RMD.  If his IRA is maintained as an inherited IRA for your benefit, his year-of-death RMD must be taken from the inherited IRA.  If you have chosen to treat the inherited IRA as your own, you can take his year-of-death RMD from any of your IRAs.

If he died in 2025, you have until the end of 2026 to complete his 2025 RMD.  However, it might be better to complete this distribution in 2025 since you can still file Married Filing Jointly for this year and perhaps have this income fall in a lower tax bracket than it would if taken next year.  Taking it this year will also reduce the balance such that next year's RMD(s) will be lower than otherwise.

[Bill_Haverland]

That's extremely helpful and answers the question perfectly.

Thank you!