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February 16, 2009

Nonrecalculation

Your Guide

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Definition

Method of determining life expectancy used to calculate post-death distributions, where once the life expectancy is determined in the determination year, 1 is subtracted from it for each subsequent year.

Method used by non-spouse beneficiaries to  determine their life-expectancy to calculate  post-death RMDs. For instance , if a 58 year old beneficiary has a life expectancy of 27.0 years, the life expectancy for each subsequent year is determined by subtracting 1 for each that that passes.

This is referred to as non-recalculation

Referring Cite

IRC§401(a)(9),  Treas. Reg. 1.401(a)(9)

Additional Helpful Information

    • If the participant dies before the required beginning date (RBD), the determination year is the year following the year the participant dies
    • If the participant dies on or after the RBD, the determination year is  either:
        • The year the participant dies, if the participant has a longer life expectancy than the beneficiary
        • The year following the year the participant dies, if the beneficiary has a longer life expectancy than the participant

         

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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