 |
Definition of 'Inherited IRA'
An individual retirement account that is left to a beneficiary after the owner's death. If the owner had already begun receiving required minimum distributions (RMDs) at the time of his or her death, the beneficiary must continue to receive the distributions as already calculated or submit a new schedule based on his or her life expectancy.
|
 |
Investopedia explains 'Inherited IRA'
If the owner had not yet chosen an RMD schedule or reached 70.5 years in age, the beneficiary of the IRA has a five-year window to withdraw the funds, which will be subject to income taxes.
A spouse who receives an inherited IRA can choose to roll it over into his or her existing IRA accounts with no penalties. This option does not exist for non-spouse beneficiaries.
Tax laws surrounding inherited IRAs are quite complicated. Beneficiaries should seek the advice of a tax professional if they inherit an IRA.
Because IRAs are relatively new, look for more changes in tax laws over time as the number of inherited IRAs grows.
|
-
If you've recently inherited a retirement plan, you must get to know the rules for distributing the funds.
Read More »
-
To take full advantage of new RMD regulations, beneficiaries need to take action before important deadlines.
Read More »
-
Retire in style. Search for the 100 highest yielding CD's from Bankrate.com. Click Here!
-
-
Interested in non-traditional investing? Make sure you follow the rules to avoid prohibited transactions.
Read More »
-
Learn how to decide between a 401(k), 403(b) or Roth to help you build your nest egg.
Read More »
-
Learn how to work with the tax man to avoid getting gouged when you convert your plans.
Read More »
-
Read More »
|
|
