What Are Your Options When You Inherit an IRA or Other Qualified Account?

Doing some research today I found a great chart produced by the IRS which highlights your options when a spouse or non-spouse inherits an IRA or other qualified Account.

As you could imagine the decision you make could cost you and your family tens of thousands in an unneeded taxes.

Two Examples of RMDs Gone Wrong with an Inherited IRA

For example, if you name your spouse as beneficiary and no contingent beneficiary and your wife passes away what would happen? Your estate would be beneficiary and look above! The IRA will have to be distributed within 5 years, instead of the 30 or 40 years your children may have been able to defer taxes until.

Another example would be if you name your surviving spouse and she survives you opting to make it her own IRA.  What then occurs if she needs money and she is not yet 59 1/2? 10% penalty!


Choosing how to handle an inherited or beneficiary IRA is something that must be researched and taken seriously. 

Subscribe To Our Newsletter
  • Twitter
  • Google+
  • Buffer
  • Delicious
  • reddit

Subscribe To Our Newsletter

Join our mailing list to receive the latest posts and updates from our team.

You have Successfully Subscribed!

Leave a reply

Share This