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They can treat the inherited IRA as their own, or take distributions based on their life expectancy. These new rules do not apply to accounts inherited before 2020, or to Roth IRAs. This story was ...
An inherited IRA is an individual retirement account opened when you inherit a tax-advantaged retirement plan (including an IRA or a retirement-sponsored plan such as a 401(k)) following the death ...
A required minimum distribution refers to a rule that says a beneficiary of an inherited traditional or Roth IRA must make annual distributions of at least a certain amount based on IRS formulas ...
The Secure Act changed the rules on inherited IRAs. Instead of being able to stretch out the withdrawals across your lifespan, you now only get 10 years on newly inherited IRAs to deplete the account.
But, because an inherited IRA usually imposes a 10-year distribution schedule, the account may also create larger tax implications than expected. However, exceptions to this timeline are available.
New rules are expected this year on inherited IRA withdrawal. The era of the stretch IRA Before 2020, beneficiaries could benefit from what was known as the “stretch IRA” provision.
Inherit: The main difference with an inherited IRA has to do with IRS rules. For example, you have more flexibility about when you choose to begin distributions and how you decide to take them.
Previously, if you inherited an IRA account, the annual required minimum distribution (RMD) was typically based on your life expectancy. But in 2020, the rules changed. Don't miss
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