spouse inherits IRA under 72(t) SEPP

L1: spouse inherits IRA under 72(t) SEPPI have long planned to use 72T SEPPs (single life amortization method)to fundretirement in my early 50sand have a question. If my wife is the sole designated beneficiarly of the IRA from which SEPPs have begun, and I die before reaching the latter of the 5 year term and age 59.5, can she elect to remain the beneficiary and continue to take these same SEPPs? This as opposed to her rolling the account over or treating it as her own and then having to start a whole new 72T SEPP (she is 1 year younger than I). Thank You.2009-11-16 04:03, By: Mike, IP: [69.144.212.61]
L2: spouse inherits IRA under 72(t) SEPPMike,It is my understanding from reading postings on this site over the past few years that the SEPP ends with the death of the participant, so it cannot be continued by the person who inherits the IRA. I have also read that if the spouse (asbeneficiary) chooses to leave it as a beneficial (inherited but left in name of original owner with new titling) IRA then they can take withdrawals prior to 59 1/2 without early withdrawal penalty. They would actually be subject to annual RMD’s based on their age after retitling the IRA as inherited one. If spouse rolled this inherited IRA (spousal rollover)into their own IRA, rather than leaving as beneficial one, they could avoid annual RMD’s prior to age 70 1/2, but would have penalties if they took withdrawals prior to age 59 1/2. That is what I have taken from the info on this site and others, but I could stand corrected by more knowledgeable participants.If you GOOGLE “IRA inheritance rules”, you willfind several good sources of info. Ken2009-11-16 13:56, By: Ken, IP: [71.192.120.143]

L3: spouse inherits IRA under 72(t) SEPPKen is correct on all his main points here, but I would correct one of his last comments.If you pass, your SEPP is ended, and your surviving spouse can take penalty free distributions as death benefits (Code 4 on 1099R) from the IRA maintained in inherited format. However, surviving spousewould NOT have to take RMDs from that IRA until the year YOU would have turned 70.5. Granted, if the surviving spouse is several years younger than you are, RMDs might need to begin prior to the spouse reaching 59.5, but they would be relatively small RMDs.The important issue however is that a surviving spouse will not have to deal with continuing your SEPP plan, except for properly reporting the SEPP distributions on the final joint tax return.2009-11-16 22:36, By: Alan S., IP: [24.116.165.60]

L4: spouse inherits IRA under 72(t) SEPPThanks for adding your expertise Alan. KEN2009-11-17 00:06, By: Ken, IP: [71.192.120.143]

L5: spouse inherits IRA under 72(t) SEPPKen and Alan S, Thank you for your responses. For my situation it sounds like a good option would be for my wife to remain the beneficiary of my IRA as it would be her primary source of income, and then consider rolling it over as her own at age 59.5 with her own designatedbeneficiaries (our children) so as to stretch the IRA across their lifetimes. I just want to clarify-a spouse can inherit an IRA as designated beneficiary and is not subject to early withdrawl penalties regardless of thedeceased age-but could be subject to RMD when the deceased would have reached 70.5.-preceding assumingthe IRA remains in deceased name with spouse as the designated beneficiary.Right?? thanks2009-11-17 01:54, By: Mike, IP: [69.144.212.61]