Updated: July 28, 2026

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Quick answer

An IRA owner who reaches age 73 must take a Required Minimum Distribution every year under IRC §401(a)(9), whether or not the cash is needed for living expenses.

For a retiree whose pension and Social Security already cover the bills, the seven highest-value uses for an unwanted RMD are: a Qualified Charitable Distribution (up to $108,000 per IRA owner in 2025 under IRC §408(d)(8)), a 529 plan contribution for grandchildren, a partial Roth conversion of the remaining IRA balance, a long-term care insurance premium reserve, a donor-advised fund contribution, a taxable brokerage reinvestment in tax-efficient holdings, and an in-kind distribution of physical metals from a self-directed gold IRA for retirees with a precious-metals position.

None of these eliminate the RMD itself; they redirect the cash so the tax outcome works for the retiree’s situation instead of against it.

About 38% of US households age 65 and over carry a Traditional IRA. Among that group, median balances exceed $200,000 for the upper half of holders, according to the most recent Federal Reserve Survey of Consumer Finances. A meaningful share of those holders enter their 70s with pension income, Social Security, and rental or annuity cashflow that already covers monthly expenses.

The IRS does not care. Once an IRA owner turns 73, the IRC §401(a)(9) Required Minimum Distribution rules force a withdrawal every year for the rest of the owner’s life. That age was set by the SECURE Act of 2019 and confirmed by SECURE 2.0 Act of 2022, Public Law 117-328.

The 2026 Uniform Lifetime Table sets the divisor for a 73-year-old at 26.5, which works out to roughly 3.77% of the prior year-end balance. On a $500,000 Traditional IRA, that is $18,867 in the first RMD year. Most retirees in this situation do not need the money.

They have to take it anyway, and the question is what to do with it.

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Why an unneeded RMD is a real planning problem, not just a paperwork item

The IRS sets the RMD floor under the Uniform Lifetime Table at IRC §401(a)(9)(D). The divisor decreases each year as the owner ages, which means the percentage of the IRA forced out as taxable income rises every year. At 73 the divisor is 26.5 (about 3.77%). At 80 it is 20.2 (about 4.95%). At 90 it is 12.2 (about 8.20%).

On a $750,000 IRA balance, the 90-year-old’s RMD is about $61,500, all taxable as ordinary income in the year of distribution.

If the retiree has substantial pension income and Social Security on top of that draw, the combined amount can push the household into a higher federal marginal bracket. It can also raise Medicare Part B and Part D premiums through the Income Related Monthly Adjustment Amount (IRMAA).

The penalty for missing the RMD entirely is steep. IRC §4974 imposes an excise tax of 25% of the under-withdrawn amount, reduced from 50% by SECURE 2.0 Act §302. That excise tax drops further to 10% if the retiree corrects the shortfall within the correction window (generally two years) and files Form 5329.

Either way, the cheaper path is to take the RMD, then redirect it. The seven options below cover the cases OPRS sees most often among readers in the 73 to 85 range whose monthly expenses are already covered by other retirement income.

The seven highest-value uses for an RMD you don’t need

Each of the seven options below has a different tax mechanic, a different timing window, and a different fit profile. The order is not a ranking; it is the order in which the IRS rules typically interact in a retiree’s calendar year. For most retirees, the right answer is a combination of two or three options applied to slices of the same RMD, not a single choice.

Option 1: Qualified Charitable Distribution (QCD) up to $108,000 per IRA owner

The Qualified Charitable Distribution under IRC §408(d)(8) is the single most tax-efficient option for retirees who give to charity regularly.

The owner must be at least 70 and a half on the date of the distribution. The QCD age stayed at 70.5 even after SECURE 2.0 raised the RMD age to 73. That means a QCD is available three years before the first RMD ever comes due.

The distribution goes directly from the IRA custodian to a qualified 501(c)(3) public charity. The amount counts against the year’s RMD and is excluded from gross income entirely.

The annual QCD cap for 2025 is $108,000 per IRA owner, indexed for inflation under SECURE 2.0 Act §307. A married couple where both spouses own IRAs and are over 70 and a half can each give up to that amount from their own accounts, doubling the household cap. The QCD does not require itemizing.

For retirees who take the standard deduction, the majority post-TCJA, this is the only mechanism that converts charitable intent into an income exclusion. Where this matters: a 75-year-old with a $30,000 RMD who already gives $15,000 a year to her church can route the $15,000 as a QCD. That satisfies half her RMD with zero income inclusion, and she keeps the standard deduction unchanged.

The federal tax savings depend on her marginal bracket; at 22% the QCD route saves about $3,300 versus taking the RMD as cash and then writing the church check.

SECURE 2.0 also added a one-time election to direct up to $54,000 (2025 amount, indexed) of QCD to a charitable gift annuity, charitable remainder unitrust, or charitable remainder annuity trust under IRC §408(d)(8)(F). The split-interest vehicle pays an income stream back to the retiree or spouse for life. The mechanics are narrow: one-time election, single calendar year, single trust or annuity per spouse. The IRS guidance is in IRS Publication 590-B under the Qualified Charitable Distributions section.

Option 2: 529 plan contributions for grandchildren or great-grandchildren

A 529 college savings plan is a state-administered education account that grows federal-tax-free and pays out tax-free for qualified higher-education and K-12 tuition expenses under IRC §529.

A retiree who takes the RMD as cash, pays the federal and state income tax, and then contributes the after-tax remainder to a 529 for a grandchild does three things at once. First, it spends down the IRA balance, which lowers future RMDs and the eventual estate tax exposure. Second, it earns a state income tax deduction in roughly 30 states that offer one.

Third, it transfers wealth to the next generation in a vehicle that compounds for 10 to 18 years before the grandchild reaches college age.

The federal annual gift exclusion in 2026 is $19,000 per recipient (the 2025 figure was $19,000, with the 2026 figure expected to remain similar pending IRS confirmation). A retiree can contribute up to that amount per grandchild per year without triggering gift tax filing.

The 529 also allows a five-year forward-funding election under IRC §529(c)(2)(B). That lets the retiree contribute up to five years of annual exclusions in a single year: $95,000 per recipient, or $190,000 from a married couple, reported on Form 709 but exempt from gift tax. The trade-off: the contribution comes from after-tax money, so the RMD has been taxed once already.

The benefit is on the back end (tax-free growth + tax-free qualified withdrawal + state income tax deduction in the contribution year).

SECURE 2.0 Act §126 added a new wrinkle worth knowing. Starting in 2024, unused 529 balances can be rolled into a Roth IRA in the beneficiary’s name. The rollover is subject to a $35,000 lifetime cap, and the 529 must have been open for at least 15 years.

For a grandchild who does not use the full 529 balance for education, the leftover converts to retirement savings. The contribution made today funds either college or the grandchild’s first 529-to-Roth rollover at age 18 or later. Family legacy framing in a single vehicle.

Option 3: Partial Roth conversion of the remaining Traditional IRA balance

A Roth conversion moves balances from a Traditional IRA into a Roth IRA, recognizing the converted amount as ordinary income in the year of conversion. The Roth IRA then grows tax-free and is exempt from RMDs during the original owner’s lifetime under IRC §408A(c)(5).

The conversion does not satisfy the RMD itself; the RMD must come out first, then the conversion happens on a separate balance. Where most retirees stumble: they try to convert the RMD amount. The IRS rejects this.

Per IRS Notice 2024-2 and IRS Publication 590-A, the RMD is treated as the first amount distributed each year and cannot be rolled into a Roth.

The strategy that does work is to take the RMD as cash, then use it to pay the income tax on a separate Roth conversion of a portion of the remaining Traditional IRA balance. That shrinks the Traditional IRA going forward.

Future RMDs are smaller because the Traditional balance is smaller. The converted dollars grow tax-free for the rest of the owner’s life. They also grow tax-free for the next 10 years inside any non-spouse beneficiary’s inherited Roth IRA under SECURE Act 2019 rules.

A 74-year-old with a $600,000 Traditional IRA who converts $40,000 a year for five years moves $200,000 plus growth into the Roth bucket, paying conversion tax annually out of RMD cashflow. The Roth balance compounds tax-free; the surviving spouse later treats the Roth as their own with no RMDs.

The conversion size each year is fact-specific. The standard approach is to fill the current bracket without crossing into the next one. For a married-filing-jointly household in 2026 with $90,000 of other taxable income, the 22% bracket runs to approximately $206,700, leaving roughly $116,700 of headroom before the 24% bracket kicks in.

A conversion of any amount up to that headroom stays at 22% on the converted dollars. Larger conversions in a single year save calendar time but at a higher marginal rate.

The IRMAA bracket thresholds and the 3.8% Net Investment Income Tax thresholds also matter. The planning horizon usually spans the 73-to-90 window, where the conversion rate (22%-24%) is compared against the projected RMD rate at age 80+ and the eventual beneficiary’s rate after death.

Option 4: Long-term care insurance premium reserve

The Genworth Cost of Care Survey, last published for 2023, reports the national median cost for a private nursing home room at approximately $116,800 per year. Assisted living runs about $64,200 per year. Long-term care insurance and hybrid life-LTC products transfer that risk for a premium.

A retiree who takes the RMD as cash and uses part of it to fund a hybrid LTC policy converts an income event into a risk transfer. The same applies to prepaying annual premiums on an existing standalone policy.

The hybrid policy form is the dominant structure today because the unused death benefit pays to heirs if LTC is never triggered, which addresses the “use it or lose it” objection to standalone LTC.

The tax mechanic is straightforward. The RMD is taxed as ordinary income whether or not the cash funds an LTC premium. The premium itself is paid with after-tax dollars. The LTC benefit, when triggered, is generally tax-free under IRC §7702B for qualified long-term care contracts.

The reserve framing works best for retirees ages 73 to 80 in good health, where the LTC insurer will still issue a policy at a reasonable premium. For retirees over 80 or with chronic conditions, the underwriting bar has typically been crossed and self-funding (using the RMD cashflow to build a taxable brokerage LTC reserve account) becomes the practical alternative.

The IRS guidance on qualified LTC contracts is in IRS Publication 502.

Option 5: Donor-advised fund (DAF) for charitable timing flexibility

A donor-advised fund is a charitable account at a sponsoring organization (Fidelity Charitable, Schwab Charitable, Vanguard Charitable, Catholic Charities USA, and community foundations are the main sponsors). The retiree contributes cash or appreciated securities, takes the charitable deduction in the contribution year if itemizing, and recommends grants to qualified charities over any time frame the retiree chooses.

A DAF differs from a direct QCD on three points. First, the DAF contribution is not excluded from RMD; the retiree takes the RMD as taxable income, then contributes the after-tax remainder.

Second, the DAF allows multi-year bunching. A retiree who normally gives $10,000 a year for ten years can instead contribute $100,000 in a single year and take a larger itemized deduction that year. Grants go out over the next decade from the single contribution. Third, the DAF cannot receive a QCD directly. IRC §408(d)(8)(B) excludes DAFs, private foundations, and supporting organizations from QCD-eligible recipients.

The DAF is the right answer when the retiree wants income recognition flexibility, meaning timing the contribution into a high-income year, plus granting flexibility across multiple charities over multiple years from a single contribution. It is the wrong answer when the retiree simply wants to exclude the RMD from income. The QCD does that more efficiently.

Retirees with both charitable intent and unneeded RMDs often combine the two. A portion of the RMD goes as a direct QCD to the church or main charity, producing zero income inclusion. The remainder goes into a DAF for bunching and multi-year discretion.

Option 6: Taxable brokerage reinvestment in tax-efficient holdings

If none of the above fit the retiree’s situation, the default destination for unneeded RMD cash is a taxable brokerage account in tax-efficient holdings. This covers retirees with no charitable intent, no grandchildren in 529 range, no Roth conversion benefit, no LTC underwriting eligibility, and no DAF interest. The structural advantage of taxable brokerage over a continued IRA balance is twofold.

First, taxable account holdings receive a step-up in basis at the original owner’s death under IRC §1014. Heirs inherit the assets at fair market value and owe capital gains tax only on appreciation after the death date.

Traditional IRA balances do not get the step-up; heirs inherit at the original basis and pay ordinary income tax on every distribution. Second, taxable account holdings can include passively managed broad-market ETFs (VTI, ITOT, VXUS), Treasury bonds, municipal bonds (federal-tax-free interest), and physical precious metals or precious-metals ETFs.

For retirees who already have a precious-metals allocation inside a self-directed gold IRA, redirecting the RMD into a taxable brokerage allocation in physical metals complements the existing IRA position. Physical metals in a taxable account get the step-up in basis at death. Physical metals inside a Traditional IRA do not.

The same metal becomes more tax-efficient for heirs depending on which bucket holds it. The cost of moving metals between IRA and non-IRA buckets (sale spread, custodial fees, depository transfer) needs to be weighed against the eventual step-up benefit, which is a horizon calculation. A common misconception: that the only way to hold gold in retirement is through the IRA.

Holding gold in a taxable brokerage or directly with a dealer is allowed; it just lacks the tax-deferral on growth that the IRA provides during the owner’s lifetime.

Option 7: In-kind distribution of physical metals from a self-directed gold IRA

For retirees who hold a self-directed gold IRA and face an RMD, the distribution can be taken in cash or in-kind. The cash option has the custodian sell metals at market and wire the proceeds. The in-kind option has the depository ship the actual coins or bars to the owner, valued at fair market value on the distribution date. Both are taxable as ordinary income on the FMV.

The in-kind path saves the sale spread and the eventual repurchase cost if the retiree wanted to keep the position outside the IRA anyway. The metals received in-kind start a new holding period at the FMV basis on the distribution date and become taxable-account property going forward, including the step-up at death.

The mechanic that catches retirees is the cash withholding for tax. The IRS requires the IRA custodian to withhold 10% federal income tax on a distribution unless the owner elects out (and state withholding may apply separately).

If the distribution is in-kind, there is no cash to withhold from. The custodian will require the owner to wire cash equal to the withholding amount before shipping the metals, or to elect zero withholding and pay the tax via estimated payments. Coordinating the in-kind distribution with the tax-payment mechanic is the only meaningful complication.

The shipping and insurance cost is paid by the IRA before the distribution, typically $50 to $300 depending on weight and depository policies. Once the metals leave the depository, they are personal property, subject to the same insurance and storage decisions as any other physical gold or silver holding.

Decision flow: how to pick the right option for your situation

The flowchart below maps the actual decision tree a retiree facing an unneeded RMD walks through in the planning year. The branches sort by the largest tax lever first (QCD) and proceed in order of typical retiree value. Most readers exit through two or three branches that they apply to slices of the same RMD, not through a single endpoint.

Decision flow for an unneeded RMD showing the branches between QCD, 529 plan, Roth conversion, LTC premium reserve, donor-advised fund, taxable brokerage reinvestment, and in-kind precious metals distribution. — The unneeded-RMD decision tree. The QCD branch handles charitable intent at zero income inclusion. The 529 and Roth conversion branches handle generational and tax-rate planning. The LTC, DAF, brokerage, and in-kind branches cover the remaining situations. Most retirees combine two or three branches in the same year.

Precious metals IRA required minimum distribution (RMD) estimator

Once required minimum distributions begin (age 73 now, 75 starting 2033), you divide the prior year-end balance by an IRS life-expectancy factor. The result is taxed as ordinary income on your federal return and, in most states, your state return. You can take a precious metals IRA RMD in cash or in metal.

Account balance on Dec 31 last year (USD) Your age this year

Estimate only, not tax advice. Uses the IRS Uniform Lifetime Table (most owners). A spouse more than 10 years younger and sole beneficiary uses a different table. Roth IRAs have no lifetime RMD. Sources: IRS Publication 590-B (Table III); IRS RMD FAQs. Consult a tax advisor.

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The diagram above is navigable as text for assistive technology. The top branch tests for charitable intent: if yes, QCD captures the charitable portion at zero income inclusion. The middle branches test for generational planning (grandchildren in 529 range), tax-rate planning (Roth conversion headroom), and risk transfer (LTC underwriting).

The bottom branches handle the residual: a DAF for charitable timing flexibility, a taxable brokerage allocation for tax-efficient compounding, or an in-kind metals distribution for retirees with an existing self-directed gold IRA position.

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Six-step procedural sequence to redirect an unneeded RMD by year-end

For a retiree who has decided to redirect the year’s RMD into one or more of the seven destinations above, the procedural sequence below covers the six discrete steps. Each step has a specific paper trail and a specific failure mode if executed out of order. Follow the sequence between the RMD calculation and the year-end deadline.

Calculate the year’s RMD before the end of Q3. Use the prior December 31 balance of each Traditional IRA, divided by the Uniform Lifetime Table divisor for the owner’s age in the distribution year (or the Joint Life Table if the sole beneficiary is a spouse more than 10 years younger). Multiple IRAs can be aggregated; the total RMD can be withdrawn from any single IRA or combination, per IRS Publication 590-B. 401(k) and 403(b) balances are calculated separately and cannot be aggregated with IRAs.
Decide the QCD portion first. The QCD path requires the funds to move directly from the IRA custodian to the charity. Most large custodians (Fidelity, Schwab, Vanguard, Equity Trust) have a standing form for QCD checks; smaller self-directed custodians may need a written request. The check is made payable to the charity, not to the IRA owner. Each QCD counts against the year’s RMD up to the $108,000 cap for 2025.
Take the cash portion of the RMD. The portion not handled by QCD is withdrawn as cash. The custodian issues IRS Form 1099-R coded 7 (normal distribution) for the full distribution amount and reports the QCD-eligible portion in box 1 with no special code (the QCD nature is established on the owner’s Form 1040, line 4a/4b).
Execute Roth conversions, 529 contributions, or DAF transfers on the cash side. These are separate transactions from the RMD. The Roth conversion is reported on Form 8606. The 529 contribution is documented by the 529 administrator and reported on the state tax return if the state offers a deduction. The DAF contribution is documented by the sponsoring organization.
Pay the estimated income tax on the taxable portion. The RMD is taxable as ordinary income whether redirected or not. Federal withholding of 10% is the default; the owner can elect a higher or lower amount on Form W-4R. State withholding rules vary. Quarterly estimated payments on Form 1040-ES are an alternative if the withholding does not cover the year’s liability.
Confirm the entire RMD is satisfied by December 31. The first RMD has an April 1 deadline of the following year; every subsequent RMD has a December 31 deadline. Missing the deadline triggers the IRC §4974 excise tax. Year-end is also the cutoff for QCD reporting in the current year; a check mailed December 30 but cashed by the charity on January 3 typically counts in the year the check was written if the QCD was a normal distribution from a regular custodian, but the safest practice is to execute QCDs by mid-December.

Five mistakes that turn an unneeded RMD into a tax problem

Each mistake below has cost retirees money OPRS readers have written in about. The corrections are mechanical: the failure mode is always at the same step.

Trying to convert the RMD itself into a Roth IRA. The RMD is the first amount distributed each year and cannot be rolled into a Roth under IRC §408(d)(3) and IRS Publication 590-A. A retiree who attempts this creates an excess contribution to the Roth IRA, subject to the 6% excise tax under IRC §4973 until corrected. Correction: take the RMD as cash first, then convert a separate portion of the remaining Traditional balance to the Roth. The conversion size is independent of the RMD amount.
Sending the QCD check to the IRA owner first instead of directly to the charity. If the IRA owner receives the cash first and then writes a personal check to the charity, the distribution does not qualify as a QCD. It becomes a taxable distribution plus a charitable deduction (which is worth less for retirees who take the standard deduction). Correction: the custodian’s QCD form specifies the charity as the payee and either mails the check directly or makes it payable to the charity for the owner to mail. The IRS treats either as a QCD-eligible direct transfer.
Forgetting that DAFs and private foundations are not QCD-eligible. IRC §408(d)(8)(B)(i) excludes donor-advised funds, private foundations, and supporting organizations from QCD-eligible recipients. A check from the IRA to a DAF is a taxable distribution, not a QCD. Correction: route QCDs only to qualified 501(c)(3) public charities; use the DAF as a recipient of separate after-tax contributions if the bunching strategy is the goal.
Underestimating the IRMAA bracket impact of stacked income. The RMD, Roth conversion, and other taxable income all stack into Modified Adjusted Gross Income, which determines Medicare Part B and Part D premiums two years later. A large conversion in 2026 raises 2028 IRMAA premiums. Correction: use the Social Security IRMAA brackets to model the marginal cost of crossing the next bracket. Convert up to but not past the threshold that would tip the household into a higher IRMAA tier.
Taking the in-kind metals distribution without arranging cash for withholding. The custodian withholds 10% federal income tax on the distribution amount. For an in-kind distribution there is no cash to withhold from; the owner must either wire cash equal to the withholding before the shipment or elect zero withholding and pay the tax separately on Form 1040-ES. Correction: coordinate the tax-payment mechanic with the depository before requesting the in-kind shipment. Most custodians require the cash to be on deposit before the metals leave the vault.

Frequently asked questions about redirecting an unneeded RMD

If both spouses own Traditional IRAs and both are over 70 and a half, can each spouse give a full QCD up to the annual cap?

Yes. The QCD cap under IRC §408(d)(8) is per IRA owner, not per household. Each spouse can give up to the annual cap (for 2025, $108,000 per spouse) from their own IRA. A household with two IRA owners both over 70 and a half can therefore give up to roughly $216,000 in QCDs in 2025, indexed annually. The two spouses must each have IRAs in their own names; community-property treatment does not change the per-owner cap.

Does an in-kind RMD distribution of physical metals from a self-directed gold IRA require the custodian to liquidate the metals first?

No. The IRS treats an in-kind distribution as a distribution of the underlying asset at fair market value on the distribution date. The custodian instructs the depository to ship the specific coins or bars to the owner; no sale occurs inside the IRA.

The owner reports the FMV as ordinary income on Form 1040 and the metals start a new holding period in taxable hands at the FMV basis. The shipping and insurance cost is paid by the IRA before the distribution.

Some custodians require a minimum distribution unit (a specific bar size or coin lot); confirm the unit with the custodian before requesting the distribution.

Can a QCD satisfy the RMD from an inherited IRA held by a non-spouse beneficiary?

Yes, with conditions. The QCD provisions apply to any IRA owner who is at least 70 and a half on the distribution date, including beneficiaries of inherited IRAs.

The 10-year SECURE Act distribution rule for non-eligible designated beneficiaries still requires the inherited IRA to be emptied by the end of the tenth year after the original owner’s death. The QCD route satisfies the annual RMD requirement during that 10-year window. It also excludes the QCD amount from the beneficiary’s income.

The beneficiary must be 70 and a half. A 65-year-old beneficiary cannot use the QCD route until they reach 70 and a half, even if the inherited IRA is mid-window.

Are RMDs from Roth IRAs required during the original owner’s lifetime?

No. IRC §408A(c)(5) exempts Roth IRAs from RMDs during the original owner’s lifetime. RMDs apply only after the owner’s death, to the beneficiary’s inherited Roth IRA, under the SECURE Act 10-year rule for non-eligible designated beneficiaries or the life-expectancy rule for eligible designated beneficiaries.

The lifetime exemption is one of the structural reasons partial Roth conversion attracts retirees with unneeded RMDs. Every dollar moved from Traditional to Roth permanently reduces future Traditional RMDs and grows tax-free for the owner’s life.

Can the unneeded RMD cash be contributed to a new Traditional IRA or Roth IRA in the same year?

The Roth IRA contribution route is available if the retiree has earned income at least equal to the contribution amount. Modified Adjusted Gross Income must also fall below the Roth phase-out thresholds: $165,000 single, $246,000 married filing jointly for 2026 per IRS Notice 2025-X release schedule. Confirm against current IRS guidance.

The Traditional IRA contribution route is also available with earned income; the contribution may not be deductible at the retiree’s income level but creates basis (non-deductible contribution reported on Form 8606). Most retirees who have already started RMDs do not have meaningful earned income, which limits both routes. A retiree with consulting or part-time wage income retains both options.

Does redirecting RMDs into a 529 plan for grandchildren count against the federal gift tax exclusion?

Yes. A 529 contribution is a completed gift to the beneficiary for federal gift tax purposes. The annual gift exclusion (in 2026, anticipated to remain at or near $19,000 per recipient, indexed annually) applies on a per-donor, per-recipient basis. A retiree contributing $19,000 each to four grandchildren in a single year gives $76,000 total within the exclusion.

A larger contribution per recipient triggers Form 709 filing and uses up some of the lifetime gift and estate tax exemption, but no gift tax is owed unless the lifetime exemption is exhausted.

The 5-year forward-funding election under IRC §529(c)(2)(B) allows a single year’s contribution to be treated as spread across five years for gift tax purposes, increasing the per-recipient cap to roughly $95,000 in the contribution year.

What happens to the unredirected portion of the RMD if the retiree dies during the distribution year?

The estate (or the beneficiary, depending on the timing) must complete the year-of-death RMD by December 31 of the year the owner died. If the owner has already taken the full RMD before death, no further action is required.

If only part was taken, the beneficiary takes the balance to satisfy the deceased owner’s RMD obligation. The following year, the beneficiary begins their own RMD schedule under either the 10-year rule or the life-expectancy rule, depending on their status as an eligible designated beneficiary.

The estate-side paperwork is simpler when the retiree spread the RMD into smaller monthly distributions throughout the year, because the year-of-death gap is smaller. Worth knowing before you act: the surviving spouse who treats the inherited IRA as their own, the “spousal rollover” election, restarts the RMD clock based on the surviving spouse’s age. This can delay RMDs significantly if the surviving spouse is younger than the deceased.

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