Inherited IRA
Candlefocus EditorThe passage of the SECURE Act in 2019 mandated that non-spousal beneficiaries must exhaust the inherited IRA within a period of 10 years. That said, the rules do vary, depending upon the type of beneficiary. For example, spousal beneficiaries have the option to treat the inherited IRA as their own, and then the lifetime rules would apply accordingly. A non-spousal beneficiary, on the other hand, would be precluded from contributing to the account, but could continue to invest and withdraw funds for the duration of the 10 year period set forth by the SECURE Act.
Overall, it’s important to take the time to understand the rules and regulations regarding inherited IRAs and how they may vary depending on the type of beneficiary. By doing so, individuals can take better advantage of the tax benefits associated with inheriting such an IRA and ensure their money is distributed and used as desired. Taking a few moments to look into the rules and understand the differences can help to ensure a smooth transition when it comes to claiming an inherited IRA and shaping one’s financial future.