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CHAPTER 8
MINIMUM DISTRIBUTIONS FROM TAX-FAVORED RETIREMENT PLANS
§ 8.01 Overview of Required Minimum Distributions
-----[1] Required Beginning Date for Minimum Distributions
-----[2] Minimum Distribution Requirements for Annuities
-----[3] Minimum Distribution Requirements for Non-Annuities
-----[4] Distributions Not Taken into Account
-----[5] IRA Ownership Election by Surviving Spouse
-----[6] Aggregation of Plans, IRAs, or Roth IRAs
-----[7] Division of Plans, IRAs, or Roth IRAs
-----[8] Source of Funds for Distributions
-----[9] Suspension of Minimum Distribution for 2009
§ 8.02 Required Beginning Date for Minimum Distributions
§ 8.03 Minimum Distribution Requirements for Annuities
-----[1] Minimum Distribution Requirements for Annuities in General
----------[a] Satisfying Minimum Distribution Requirements
----------[b] Satisfaction of Initial Minimum Distribution Requirement
----------[c] Annuity Beginning Too Late to Satisfy Initial Minimum Distribution Requirements
----------[d] Annuity Starting before Required Beginning Date
-----[2] Requirements Applicable to Fixed Term Annuities
----------[a] Satisfying Requirements Applicable to Fixed Term Annuities
----------[b] If Spouse Is Sole Beneficiary
----------[c] Payments Starting Before the Required Beginning Date
----------[d] Retiree Dies before the Required Beginning Date
-----[3] Requirements Applicable to Lifetime Annuities
----------[a] When Requirements Applicable to Lifetime Annuities Automatically Satisfied
----------[b] Payments to Younger Nonspouse Beneficiary
----------[c] Minor or Disabled Child
----------[d] Payments Guaranteed for Fixed Term Under a Lifetime Annuity
-----[4] Annuity Payments that Increase Over Time
----------[a] Increases Allowed by Tax Law
----------[b] Additional Exceptions for Purchased Annuities
----------[c] Additional Exceptions for Certain Annuities Paid by a Defined Benefit Plan
-----[5] Changing the Annuity Payment Period
-----[6] Insurance Company Annuity Purchased by Plan or IRA
-----[7] Additional Rules for Annuities Under Defined Benefit Plans
----------[a] Accrual of Additional Benefits
----------[b] Retirement After Age 70 ½
----------[c] Lump Sum Distribution in Lieu of Annuity
§ 8.04 Minimum Distribution Requirements for Non-Annuities
-----[1] Required Non-Annuity Distributions to the Retiree
----------[a] When Required Non-Annuity Distributions Must Be Made
----------[b] Distributions to Retiree Based on Adjusted Account Balance
---------------[i] Determination of Adjusted Account Balance
---------------[ii] Adjusted Account Balance for a Qualified Retirement Plan
---------------[iii] Adjustment of Account Balance for Certain Subsequent Year Events
----------[c] Computation of Retiree’s Required Minimum Distribution
---------------[i] Formula to Compute Retiree’s Required Minimum Distribution
---------------[ii] Liberal Non-Annuity Distribution Rule for Married Retiree
---------------[iii] Distributions in Excess of Required Minimum Distribution
---------------[iv] Treatment of Unvested Benefits
-----[2] Required Non-Annuity Distributions to Beneficiaries
----------[a] Requirements Depend on Identity of Designated Beneficiaries
---------------[i] Identifying Designated Beneficiaries
---------------[ii] The Oldest Designated Beneficiary
---------------[iii] Beneficiaries that Are Not Individuals
----------[b] Death of the Retiree on or after the Required Beginning Date
---------------[i] Payment of Retiree's Unpaid Distribution After Death of Retiree
---------------[ii] No Designated Beneficiary
---------------[iii] Spouse as Sole Designated Beneficiary
---------------[iv] Other Designated Beneficiaries
----------[c] Death of the Retiree Before the Required Beginning Date
---------------[i] Methods for Satisfying Minimum Distribution Requirements
---------------[ii] The Five-Year Rule
---------------[iii] The Life Expectancy Rule
--------------------[A] When the Life Expectancy Rule Applies
--------------------[B] Spouse as Sole Designated Beneficiary
--------------------[C] Other Designated Beneficiaries
---------------[iv] Spouse Dies before Minimum Distributions Required
---------------[v] Choice of Distribution Rule by Spouse Who is Sole Beneficiary
--------------------[A] Considerations Affecting Choice of Distribution
--------------------[B] Death in Calendar Year before Year Attaining Age 65 ½
--------------------[C] Death in Calendar Year Attaining Age 65 ½ or Subsequent Years
---------------[vi] Choice of Distribution Rule where Spouse Not Sole Beneficiary
----------[d] Use of Trusts to Provide for Beneficiaries
---------------[i] Advantages of Using a Trust for Beneficiaries
---------------[ii] Designated Beneficiary Exception for Certain Trusts
---------------[iii] Use of Conduit or Grantor Trusts
---------------[iv] Use of Other Trusts with Identifiable Beneficiaries
---------------[v] Use of Powers of Appointment
---------------[vi] Trust with Non-Individual Beneficiary
---------------[vii] Separate Accounts, Separate Trusts, and Sub-Trusts
-----[3] Annuity Starting After Date Minimum Distributions Required
§ 8.05 Distributions/Transfers Not Satisfying Minimum Distribution Requirements
-----[1] Trustee-to-Trustee Transfers
-----[2] Indirect Rollovers
-----[3] Other Distributions
§ 8.06 Aggregation or Division of Qualified Retirement Plans, IRAs or Roth IRAs
-----[1] Minimum Distributions Must Generally Be Determined Separately
-----[2] Meaning of Separate Accounts
-----[3] Advantages of Separate Accounts for Beneficiaries
-----[4] Divisions of Plan Accounts and Inherited IRAs Held by Trusts
§ 8.07 Source of Funds Used to Make Minimum Distributions
§ 8.08 Effect of QDROs on Minimum Distributions
§ 8.09 Minimum Distributions if Spouse Elects Ownership of IRA or Roth IRA
-----[1] Requirements and Consequences of a Spousal Election
-----[2] Using the Ownership Election to Defer Income Taxes
-----[3] Spouse Younger than Decedent who Dies on or After Required Beginning Date
-----[4] Spouse Younger than Decedent and Younger than Age 66 ½
-----[5] Spouse Younger than Decedent in Other Situations
-----[6] Spouse Older than Decedent
-----[7] Spousal Ownership of Roth IRAs
-----[8] IRA or Roth IRA Ownership Election for Young Surviving Spouse?
-----[9] Alternative Where IRA (or Roth IRA) Ownership Election Not Available
§ 8.10 Suspension of Minimum Distribution Requirements for 2009
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MINIMUM DISTRIBUTIONS FROM TAX-FAVORED RETIREMENT PLANS
§ 8.01 Overview of Required Minimum Distributions
-----[1] Required Beginning Date for Minimum Distributions
-----[2] Minimum Distribution Requirements for Annuities
-----[3] Minimum Distribution Requirements for Non-Annuities
-----[4] Distributions Not Taken into Account
-----[5] IRA Ownership Election by Surviving Spouse
-----[6] Aggregation of Plans, IRAs, or Roth IRAs
-----[7] Division of Plans, IRAs, or Roth IRAs
-----[8] Source of Funds for Distributions
-----[9] Suspension of Minimum Distribution for 2009
§ 8.02 Required Beginning Date for Minimum Distributions
§ 8.03 Minimum Distribution Requirements for Annuities
-----[1] Minimum Distribution Requirements for Annuities in General
----------[a] Satisfying Minimum Distribution Requirements
----------[b] Satisfaction of Initial Minimum Distribution Requirement
----------[c] Annuity Beginning Too Late to Satisfy Initial Minimum Distribution Requirements
----------[d] Annuity Starting before Required Beginning Date
-----[2] Requirements Applicable to Fixed Term Annuities
----------[a] Satisfying Requirements Applicable to Fixed Term Annuities
----------[b] If Spouse Is Sole Beneficiary
----------[c] Payments Starting Before the Required Beginning Date
----------[d] Retiree Dies before the Required Beginning Date
-----[3] Requirements Applicable to Lifetime Annuities
----------[a] When Requirements Applicable to Lifetime Annuities Automatically Satisfied
----------[b] Payments to Younger Nonspouse Beneficiary
----------[c] Minor or Disabled Child
----------[d] Payments Guaranteed for Fixed Term Under a Lifetime Annuity
-----[4] Annuity Payments that Increase Over Time
----------[a] Increases Allowed by Tax Law
----------[b] Additional Exceptions for Purchased Annuities
----------[c] Additional Exceptions for Certain Annuities Paid by a Defined Benefit Plan
-----[5] Changing the Annuity Payment Period
-----[6] Insurance Company Annuity Purchased by Plan or IRA
-----[7] Additional Rules for Annuities Under Defined Benefit Plans
----------[a] Accrual of Additional Benefits
----------[b] Retirement After Age 70 ½
----------[c] Lump Sum Distribution in Lieu of Annuity
§ 8.04 Minimum Distribution Requirements for Non-Annuities
-----[1] Required Non-Annuity Distributions to the Retiree
----------[a] When Required Non-Annuity Distributions Must Be Made
----------[b] Distributions to Retiree Based on Adjusted Account Balance
---------------[i] Determination of Adjusted Account Balance
---------------[ii] Adjusted Account Balance for a Qualified Retirement Plan
---------------[iii] Adjustment of Account Balance for Certain Subsequent Year Events
----------[c] Computation of Retiree’s Required Minimum Distribution
---------------[i] Formula to Compute Retiree’s Required Minimum Distribution
---------------[ii] Liberal Non-Annuity Distribution Rule for Married Retiree
---------------[iii] Distributions in Excess of Required Minimum Distribution
---------------[iv] Treatment of Unvested Benefits
-----[2] Required Non-Annuity Distributions to Beneficiaries
----------[a] Requirements Depend on Identity of Designated Beneficiaries
---------------[i] Identifying Designated Beneficiaries
---------------[ii] The Oldest Designated Beneficiary
---------------[iii] Beneficiaries that Are Not Individuals
----------[b] Death of the Retiree on or after the Required Beginning Date
---------------[i] Payment of Retiree's Unpaid Distribution After Death of Retiree
---------------[ii] No Designated Beneficiary
---------------[iii] Spouse as Sole Designated Beneficiary
---------------[iv] Other Designated Beneficiaries
----------[c] Death of the Retiree Before the Required Beginning Date
---------------[i] Methods for Satisfying Minimum Distribution Requirements
---------------[ii] The Five-Year Rule
---------------[iii] The Life Expectancy Rule
--------------------[A] When the Life Expectancy Rule Applies
--------------------[B] Spouse as Sole Designated Beneficiary
--------------------[C] Other Designated Beneficiaries
---------------[iv] Spouse Dies before Minimum Distributions Required
---------------[v] Choice of Distribution Rule by Spouse Who is Sole Beneficiary
--------------------[A] Considerations Affecting Choice of Distribution
--------------------[B] Death in Calendar Year before Year Attaining Age 65 ½
--------------------[C] Death in Calendar Year Attaining Age 65 ½ or Subsequent Years
---------------[vi] Choice of Distribution Rule where Spouse Not Sole Beneficiary
----------[d] Use of Trusts to Provide for Beneficiaries
---------------[i] Advantages of Using a Trust for Beneficiaries
---------------[ii] Designated Beneficiary Exception for Certain Trusts
---------------[iii] Use of Conduit or Grantor Trusts
---------------[iv] Use of Other Trusts with Identifiable Beneficiaries
---------------[v] Use of Powers of Appointment
---------------[vi] Trust with Non-Individual Beneficiary
---------------[vii] Separate Accounts, Separate Trusts, and Sub-Trusts
-----[3] Annuity Starting After Date Minimum Distributions Required
§ 8.05 Distributions/Transfers Not Satisfying Minimum Distribution Requirements
-----[1] Trustee-to-Trustee Transfers
-----[2] Indirect Rollovers
-----[3] Other Distributions
§ 8.06 Aggregation or Division of Qualified Retirement Plans, IRAs or Roth IRAs
-----[1] Minimum Distributions Must Generally Be Determined Separately
-----[2] Meaning of Separate Accounts
-----[3] Advantages of Separate Accounts for Beneficiaries
-----[4] Divisions of Plan Accounts and Inherited IRAs Held by Trusts
§ 8.07 Source of Funds Used to Make Minimum Distributions
§ 8.08 Effect of QDROs on Minimum Distributions
§ 8.09 Minimum Distributions if Spouse Elects Ownership of IRA or Roth IRA
-----[1] Requirements and Consequences of a Spousal Election
-----[2] Using the Ownership Election to Defer Income Taxes
-----[3] Spouse Younger than Decedent who Dies on or After Required Beginning Date
-----[4] Spouse Younger than Decedent and Younger than Age 66 ½
-----[5] Spouse Younger than Decedent in Other Situations
-----[6] Spouse Older than Decedent
-----[7] Spousal Ownership of Roth IRAs
-----[8] IRA or Roth IRA Ownership Election for Young Surviving Spouse?
-----[9] Alternative Where IRA (or Roth IRA) Ownership Election Not Available
§ 8.10 Suspension of Minimum Distribution Requirements for 2009
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an attorney, accountant, or other professional; and the author is not offering legal, accounting, or
other professional advice. The material presented on this website is not intended for use, and may
not be used, to avoid tax penalties. If you need legal advice or other professional help, you should
seek (from an independent attorney, accountant, or other competent professional) advice based on
your own particular circumstances.
matter covered. However, the information provided on this website is not a substitute for the advice of
an attorney, accountant, or other professional; and the author is not offering legal, accounting, or
other professional advice. The material presented on this website is not intended for use, and may
not be used, to avoid tax penalties. If you need legal advice or other professional help, you should
seek (from an independent attorney, accountant, or other competent professional) advice based on
your own particular circumstances.