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FAMILY FINANCES
November 1, 2019

Am I required to take withdrawals from my inherited IRA assets?

Answered by
Debra Greenberg
Director, Personal Retirement Strategy and Solutions, Bank of America
In most cases, yes. In general, IRA accounts require owners to make annual withdrawals known as required minimum distributions, or RMDs, depending on where the inherited assets are coming from and what you do with them. Because the rules about inherited IRAs can be complex, guidance from a tax professional is of critical importance. But, for the most part:
"It depends on what you do with the inherited assets. But, in most cases you will need to take required minimum distributions — known as RMDs."
— Debra Greenberg, Director, Personal Retirement Strategy and Solutions, Bank of America
  • If the inherited IRA assets are from your spouse and you roll over the money to your own IRA, you must begin RMDs based on your own life expectancy once you pass age 70½.
  • If — as a spouse or a non-spouse — you establish an inherited IRA account, RMDs generally must begin the year after the death of the account's original owner. These RMDs are also based on your own life expectancy.
  • If you distribute all inherited IRA assets by December 31 of the fifth anniversary year of the original account owner's death, what's known as the "five-year rule" generally takes effect, removing the need for RMDs.
Should you fail to withdraw the full RMD in any given year in which you are required to, it can result in additional taxes of 50% of the RMD that was not withdrawn. If you delay the first distribution until April 1st of the year following the year you turn age 70½, you will be required to take two distributions that year.
To learn more about your options for distributing inherited IRA assets, read "Can I roll over an inherited IRA into my own IRA?"
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