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Author: seith Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19378  
Subject: IRA Distributions Article 8/7 Date: 8/10/2000 6:32 PM
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I am very interested in the hybrid method for determining MRD discussed in the 8/7/2000 article. I will be 70 in Nov. and am in the process of thinking through the options. Mrs. Seith is 74 and my primary beneficiary. We have five sons who are listed as secondary beneficiaries.

Could you elaborate on how the hybrid method works if I die first. (Her family is very long-lived and I have just about given up hope of ever having a young bride). Does the amount that she takes over go from recalculation to term certain? Does the unique table spell out the MRD factors and years for her to make withdrawals?

Also, it isn't clear how it would work if she predeceases me. In this case why would there be time left in her term certain period? Wouldn't my recalculation method be operative if this happened?

I have found your articles and those of TMF Taxes most useful. Thanks for your help.

Seith

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4765 of 19378
Subject: Re: IRA Distributions Article 8/7 Date: 8/11/2000 8:19 AM
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Greetings, Seith, and welcome. You wrote:

<<I am very interested in the hybrid method for determining MRD discussed in the 8/7/2000 article. I will be 70 in Nov. and am in the process of thinking through the options. Mrs. Seith is 74 and my primary beneficiary. We have five sons who are listed as secondary beneficiaries.

Could you elaborate on how the hybrid method works if I die first. (Her family is very long-lived and I have just about given up hope of ever having a young bride). Does the amount that she takes over go from recalculation to term certain? Does the unique table spell out the MRD factors and years for her to make withdrawals?

Also, it isn't clear how it would work if she predeceases me. In this case why would there be time left in her term certain period? Wouldn't my recalculation method be operative if this happened?>>


In the hybrid method wherein you use recalculation for yourself and term certain for your spousal beneficiary, when you die first your spouse may continue distributions under the pattern established at the beginning of MRD, but does not have to do that. In fact, it's usually better for that spouse to take over the IRA as his/her own and name a new beneficiary to enable a stretch IRA for the children.

If your spouse predeceases you, you must continue to use the MRD factors as established by the hybrid method table. That table incorporates the original life expectancy of the deceased spouse, and simply reduces it by 1 for every year MRD have been in effect. Thus, when you die the kids may use whatever is left of the original life expectancy of your spouse when MRD began.

Regards..Pixy

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Author: retdigger Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4774 of 19378
Subject: Re: IRA Distributions Article 8/7 Date: 8/12/2000 10:35 PM
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Concerning the hybrid method for IRA distributions, there is no table to use in the IRS publications. There is an example on how to calculate it, but using that method I ran out of guidance around age 85. I am waiting to hear from the IRS (if I hear from them at all). I don't understand why they can't publish a table for this since I think it is the best way to go. Has anyone computed this? (I could use 71/70 age calculations) I have talked to IRA holders that don't 'allow' term certain and asked them why they care.I said I would be responsible for the calculation since I had more than one IRA and would decide where I would get the money myself.They then said I could do that. Anyone else had experience with this? This situation should not be unusual.

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