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Jack would have been 68-69 depending on his birthday and date of death in 2006. Thus, he would have not yet reached his required beginning date for distributions. Since he died before his required beginning date, Jill would have the following options: 1) take a lump sum distribution, 2) deplete all funds by the end of the fifth year following Jack's death, 3) roll the plan over to her own plan, or 4) treat the plan as an inherited/beneficiary plan and take required minimum distributions based on her life expectancy and beginning the year that follows the year Jack would have turned 70.5.
Another expert here - below is the additional information/clarification you requested.
Just to reiterate, Spouses who are the sole designated beneficiary can:1. treat an IRA as their own, or
2. base RMDs on their own current age,
3. base RMDs on the decedent's age at death, reducing thedistribution period by one each year, or
4. withdraw the entire account balance by the end of the 5th yearfollowing the account owner's death, if the account owner died before therequired beginning date.
If the account owner died before the required beginning date, the surviving spouse can wait until the owner would have turned 70½ to begin receiving RMDs.
As to treat the plan as an inherited/beneficiary plan and take required minimum distributions based on her life expectancy and beginning the year that follows the year Jack would have turned 70.5. If the owner died before his RBD, baserequired minimum distributions for years after the year of the owner's deathgenerally on the spouse's single life expectancy as shown on Table I in Appendix C.
You are the owner's surviving spouse and the sole designated beneficiary. The owner would have turned age 70½ in 2013. Distributions begin in 2013. You become 69 years old in 2013. You use Table 1. Your distribution period for 2013 is 17.8. For2014, when you are 70 years old, your distribution period is 17.0. For 2015,when you are 71 years old, your distribution period is 16.3.
As to deplete all funds by the end of the fifth year following Jack's death, a beneficiary who is an individual may be required to take the entire account by the end of the fifth year following the year of the owner's death. If this rule applies, no distribution is required for any year before that fifth year.
My point of reference is Publication 590 which can be found at the following: http://www.irs.gov/publications/p590/ch01.html#en_US_2012_publink1000230753.
I hope this additional information is helpful to you. Thank you.
Please see the following as it pertains to all retirement plans. http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics---Required-Minimum-Distributions-(RMDs)
No, the text is correct. Generally, only the 5 year rule applies when no beneficiary is named. In that case, the new owner must generally make withdrawals over 5 years. However, the surviving spouse has that option. As I noted above, it can be confusing because most references to the 5-year rule are when that is the only option. It would be unusual for the spouse to exercise the option since they can also roll over or treat the retirement as an inherited plan. Yes, a lump sum distribution is always allowed by the retirement plan terms. The code I provided doesn't say that because it governs only what minimum distributions are when a "stretch" method is elected.Please let me know if you require additional assistance. Thanks.