It depends. If the beneficiary of your IRA is your spouse, he or she will be eligible to transfer the amount to his or her own IRA, from which distributions are not required until age 70.5.

If the beneficiary is not your spouse, then the options available may be determined by the provisions in the IRA plan document. Most IRA custodians follow the regulations and will allow beneficiaries to take distributions over their life expectancies. Under this life-expectancy method, beneficiaries are required to withdraw only a certain amount each year. But since IRA custodians are not required to follow the guidelines set in the regulations, some IRA custodians require beneficiaries to take a lump-sum distribution after the death of the IRA owner. You should check with your current IRA custodian immediately to determine the options it allows for your IRA beneficiaries. If the options are not consistent with your estate-planning goals, then you may want to consider transferring the IRA to an IRA custodian that provides the options you find acceptable.

See Inherited Retirement Plan Assets - Part One: Options for Beneficiaries and Inherited Retirement Plan Assets - Part Two: Important Dates for Beneficiaries for information on beneficiary options and calculating the minimum amounts that should be withdrawn each year under the life expectancy method.

This question was answered by Denise Appleby
(Contact Denise)

  1. Can personal loans be included in bankruptcy?

    Personal loans from friends, family and employers fall under common categories of debt that can be discharged in the case ... Read Full Answer >>
  2. When can catch-up contributions start?

    Most qualified retirement plans such as 401(k), 403(b) and SIMPLE 401(k) plans, as well as individual retirement accounts ... Read Full Answer >>
  3. Who can make catch-up contributions?

    Most common retirement plans such as 401(k) and 403(b) plans, as well as individual retirement accounts (IRAs) allow you ... Read Full Answer >>
  4. Can you have both a 401(k) and an IRA?

    Investors can have both a 401(k) and an individual retirement account (IRA) at the same time, and it is quite common to have ... Read Full Answer >>
  5. Are 401(k) contributions tax deductible?

    All contributions to qualified retirement plans such as 401(k)s reduce taxable income, which lowers the total taxes owed. ... Read Full Answer >>
  6. Are 401(k) rollovers taxable?

    401(k) rollovers are generally not taxable as long as the money goes into another qualifying plan, an individual retirement ... Read Full Answer >>
Related Articles
  1. Retirement

    Two Heads Are Better Than One With Your Finances

    We discuss the advantages of seeking professional help when it comes to managing our retirement account.
  2. Taxes

    Tax Breaks For Volunteering

    Your volunteer ventures could earn you some welcome tax deductions, along with the satisfaction of helping others.
  3. Retirement

    5 Secrets You Didn’t Know About Traditional IRAs

    A traditional IRA gives you complete control over your contributions, and offers a nice complement to an employer-provided savings plan.
  4. Taxes

    Six Ways Your Tax Preparer Knows You’re Lying

    Cheating on your taxes is asking for trouble. You might get away with it, but you’re playing with fire and likely to get burned.
  5. Retirement

    Using Your IRA to Invest in Property

    Explain how to use an IRA account to buy investment property.
  6. Retirement

    How a 401(k) Works After Retirement

    Find out how your 401(k) works after you retire, including when you are required to begin taking distributions and the tax impact of your withdrawals.
  7. Retirement

    Are Fees Depleting Your Retirement Savings?  

    Each retirement account will have a fee associated with it. The key is to lower these fees as much as possible to maximize your return.
  8. Retirement

    Retirement Tips for Doctors

    Learn five tips that can help physicians get back on schedule in terms of making financial preparations they need to retire.
  9. Investing Basics

    Do You Need More Than One Financial Advisor?

    Using more than one financial advisor for money management has its pros and cons.
  10. Taxes

    The Purpose Of The W-9 Form

    The W-9 form provides key data your clients need if you're an independent contractor. Just be sure you're not really an employee who should fill out a W-4.
  1. Taxes

    An involuntary fee levied on corporations or individuals that ...
  2. W-2 Form

    The W-2 form reports an employee's annual wages and the amount ...
  3. Sales Tax

    A consumption tax imposed by the government on the sale of goods ...
  4. Fiduciary

    A fiduciary is a person who acts on behalf of another person, ...
  5. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. ...
  6. Duty Free

    Goods that international travelers can purchase without paying ...

You May Also Like

Hot Definitions
  1. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  2. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
Trading Center