Spouse Inherited 401(k) vs. IRA and RMD table used.

[Lisa3588]

Spouse is 5 yrs younger than husband.  In 2019, Spouse inherited 401(k) balance and left it in the plan. Decedent was taking RMD.  The spouse will use Single Life Expectancy table to continue RMDs for amounts left in plan, but if balance is transferred to spouse's IRA, spouse can use Uniform Life Expectancy table to lower annual RMD. Yes?

[MaryK4]

That is correct-the spouse can roll the funds over to the spouse's IRA and use their age for the RMD.  

[Lisa3588]

Yes, I understand that the surviving spouse uses their age for the RMD.  That's true regardless of table used.  The question is whether by moving the 401(k) balance to an IRA, do they use Table III, rather than Table I and thereby lower their RMD.

[MaryK4]

Yes, the Table III Uniform Lifetime which will lower the RMD

[Lisa3588]

Table I, Single Life Expectancy, provides a higher RMD than Table III, Uniform Lifetime.  For example, at age 75, the divider under the former is 13.4 whilst the divider under the latter at age 75 is 22.3.  So, if the IRA balance is $100,000 using Table I gives an RMD of $7,462 compared to an RMD of $4,484 using Table III.  Hence the smaller RMD in an IRA compared to leaving the account in the 401(k) plan.

[dmertz]

Once you move the money to your own IRA, it's no longer in an inherited IRA.  Since you did this move in 2019, your 2020 RMD will calculated using the Uniform Lifetime Table and the FMV in your traditional IRAs on December 31, 2019 which will produce a lower RMD that you would have if you left the money in the inherited IRA and had to take a beneficiary RMD instead.