Ask Terry Questions Inherited IRA that was taking RMDs

Inherited IRA that was taking RMDs

By Terry Savage on August 19, 2023 | Financial Planning / Retirement

Can you tell me what is rules for a non spouse Inherited IRa. My mom died in dec 2O21. I am in my 60s. I just read the that in July IRS will not make final ruling until 2024

It is a regular IRA s and my mom had been taking her RMDs.

I am under 10 year rule. Just confused.

Terry Says

Here’s the latest on that from Fidelity:

Then, there’s this from Vanguard (I highlighted the key sentence):

Inherited RMD calculation methods
The date of death of the original IRA owner and the type of beneficiary will determine what distribution method to use. You must take an RMD for the year of the IRA owner’s death if the owner had an RMD obligation that wasn’t satisfied.

For an inherited IRA received from a decedent who passed away after December 31, 2019:
Generally, a designated beneficiary is required to liquidate the account by the end of the 10th year following the year of death of the IRA owner (this is known as the 10-year rule). There are exceptions for certain eligible designated beneficiaries, defined by the IRS, as someone who is either:

The IRA owners’ spouse.
The IRA owner’s minor child.**
An individual who is not more than 10 years younger than the IRA owner.
Disabled (as defined by the IRS).
Chronically ill (as defined by the IRS).

Bottom line: Ask your IRA custodian what rules apply. The are the ones who will guide you, knowing all the details.

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