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.