IRA Single Life Table
(For Use By Beneficiaries)
| Age | Life Expectancy | Age | Life Expectancy | Age | Life Expectancy |
|---|---|---|---|---|---|
| 40 | 43.6 | 61 | 24.4 | 82 | 9.1 |
| 42 | 41.7 | 63 | 22.7 | 84 | 8.1 |
| 44 | 39.8 | 65 | 21.0 | 86 | 7.1 |
| 46 | 37.9 | 67 | 19.4 | 88 | 6.3 |
| 48 | 36.0 | 69 | 17.8 | 90 | 5.5 |
| 50 | 34.2 | 71 | 16.3 | 92 | 4.9 |
| 52 | 32.3 | 73 | 14.8 | 94 | 4.3 |
| 54 | 30.5 | 75 | 13.4 | 96 | 3.8 |
| 56 | 28.7 | 77 | 12.1 | 98 | 3.4 |
| 58 | 27.0 | 79 | 10.8 | 100 | 2.9 |
Beneficial IRA and Tax Savings
Most beneficiaries who inherit a tax qualified account such as an IRA will have the ability to defer income taxes on a significant portion of the funds. A beneficiary who chooses to utilize the “Stretch IRA” method will only be required to withdrawal funds (and pay taxes) based on his/her life expectancy.
For Example:
A 46 year old who inherits a $120,000 IRA from a parent would only be required to withdrawal $3166.23 from the account. $120,000 divided by 37.9 (37.9 years is the life expectancy of a 46 year old) = $3166.23
Using this example, the 46 year old beneficiary would potentially lower his/her taxable income significantly. Rather than paying taxes on the entire $120,000 and potentially moving to a higher tax bracket, the beneficiary would be stretching the payments out for his/her lifetime.
It is worth noting, that in most cases (depending on the type of investment account selected) the beneficiary could withdrawal additional funds if needed. The advantage is the beneficiary does not need to withdrawal and pay taxes on the entire amount in one year.
