✪ Inherited an IRA? The new rules apply (Finally)

Financial Planning Solutions, LLC · 2 years ago · 553 views

Lizzie inherits an IRA from her dad in 2024. Her dad was 78 years old. Since her dad was over his Required Minimum Distribution (RMD) age, Lizzie is required to take her first RMD in 2025 and do so under the 10-year rule and then empty the account by the 10th year from the date of death (if money is left) Billy inherits an IRA from his aunt who died in 2022 at the age of 66. Since his aunt wasn’t at their RMD age, Billy is not required to take an RMD each year however, the account must be emptied by the 10th year after she died. Mary inherits a Roth IRA from her mom in 2024. Since Roth IRA’s do not have a required minimum distribution (RMD), Mary does not have to withdraw anything until the 10th year after her mom died. Mary can let this account grow over this time period and when money is withdrawn (whether during the 10-year period or all at once in year 10) the money is all tax free to Mary. Joanne’s husband died in 2024 and left his IRA to Joanne. Under the Spouse Rule, Joanne is not required to withdraw money from her husband’s IRA until she reaches her required minimum distribution (RMD) date. Since she was born in 1961, her first RMD must begin in the year she turns 75.