Inherited IRA — Must I take RMD?
Hi Terry – My wife and her brother inherited an IRA from their mom who recently passed away in which the annual RMD has yet to be taken. With the account being split and transfered to an Inherited IRA account, my wife now has $35K in which she has to take the RMD before the end of the year. We were told the RMD is $2551 plus whatever we want taken out for the Tax withholding? One, how much should we take out for the tax withholding? Secondly, the rest of the money is in a conservative fund and curious if we should keep it with Schwab (the current provider) and move it to a more aggressive fund (as my wife is 51) or transfer to another provider that we are more comfortable with (as we have had no experience with Schwab)?
Terry Says
First, the IRS has just ruled that the RMD rule was too confusing. It says that the person who inherits the IRS must continue taking RMDs (based on the inheritor’s age) IF the decedent had already started taking RMDs already.
But the IRS just announced they are not going to penalize people who inherited IRAs and did not take an RMD in 2021 or2022. In effect, they are going to give you a pass — NO RMDs required for 2022!!
And they will likely fix this rule for next year, so stay tuned!
As for the investments, Schwab is a great low-cost place, and this would be a good time to leave it in the conservative fund!!
