For starters, if this is not your first spouse, then make sure no ex-spouse is still the designated beneficiary of your IRA.
Now, back to your question.
Yes, if your spouse is more than 10 years your junior, then there are some special steps to take when calculating your annual required minimum distribution (RMD) from your IRA.
This subject was taken up by Kiplinger's in an article titled "Retirement Distributions When Your Spouse Is Much Younger."
As the article explains, most people use Life-Expectancy Table III, the Uniform Lifetime Table, in Appendix B of IRS Publication 590 to calculate their required minimum distributions ("RMD"). In the general population, most people taking RMDs are within 10 years of their spouses age-wise.
If your younger spouse is your sole primary beneficiary (i.e., your are not including your children from a previous marriage in a share off the top), then you should use Life-Expectancy Table II, the Joint Life and Last Survivor Expectancy, to determine your RMD.
What is the difference between Table III and Table II?
The latter requires you to withdraw fewer dollars each year than if the age of your spouse was within 10 years of your own.
Here is an illustration from the original article:
If you are 70½ in 2016 and need to take your first RMD, then you would divide your account balance as of the end of 2015 by 27.4.
Consequently, you would need to pull $3,649.64 from your $100,000 IRA.
But what if your sole beneficiary is your spouse, age 53?
In that case, the calculus is in your favor. You would divide your account balance by 32.6 and only pull $3,067.48 from that IRA.
In Life-Expectancy Table II, look for your age on the left side of the table, then find where that line intersects your spouse's age on the top.
Some RMD calculators will let you input your spouse's birthdate to determine your RMD, even if you need to use the different life-expectancy table.
You should also make sure your IRA administrator knows your spouse's birthdate, so it will use the correct table when calculating your RMDs—particularly if you have automatic RMD withdrawals.
By the way, if you did not get around to it before 2015 slid into the record books, this would be an excellent time to review your beneficiary designations and make sure they are up-to-date.
Did you know that the beneficiary designations on your retirement accounts and life insurance take precedence over the information in your will?
They do indeed.
Even if you have updated your will, your IRA will go to your designated beneficiary. This will be the case even if you have been divorced, married, or wanted to change your beneficiary for any other reason.
An experienced estate planning attorney can help you ensure that everything is buttoned up nice and tight when it comes to your estate.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Kiplinger (December 16, 2015) "Retirement Distributions When Your Spouse Is Much Younger"