Ask Terry Questions Beneficiary Ira conversion to a Roth IRA

Beneficiary Ira conversion to a Roth IRA

By Terry Savage on April 30, 2019 | Investments

I’m 64 and have recently become a beneficiary from my mothers Ira.
I was thinking about converting it to a Roth IRA but am unsure about the tax consequence. I have a standard ira and my wife has a 403b. Should I start a Roth account with this beneficiary Ira and slowly start adding to it ?

Terry Says

Wait, whoa!  You now have an “inherited IRA”.  Ask the “custodian” bank or mutual fund company how soon you MUST start withdrawals over your lifetime, and how much must be withdrawn each year.  The balance should remain invested in the IRA, appropriately and perhaps more aggressively that your mother’s choices.

You definitely can’t add money to it.  And you can’t convert it to a Roth.  It should remain separate from your other investments and retirement plans, growing tax-deferred — subject to required annual withdrawals — as long as possible.


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