Ask The Hammer – Inherited IRAs
Buckingham Wealth Partners' Jeffrey Levine describes the beneficiary and distribution rules for inherited IRAs.
Key Takeaways
- IRAs inherited in 2020 or later are generally subject to the SECURE Act's 10-year rule, requiring all funds to be distributed within 10 years of the account holder's death
- IRAs inherited before 2020 may still allow beneficiaries to stretch distributions over their lifetime—gather your inheritance date as this is the critical dividing line
- If you qualify as an "eligible designated beneficiary" (spouse, disabled individual, chronically ill person, or minor child), you may be exempt from the 10-year rule and can continue stretching distributions
- When a beneficiary subject to the 10-year rule passes away, their successor beneficiaries get their own new 10-year window to complete distributions—not an unlimited stretch
- Consult a tax or financial professional with your specific inheritance details (who you inherited from, when, and your beneficiary status) before making distribution decisions, as the rules vary significantly
Ask The Hammer - Inherited IRAs: In this episode of Ask The Hammer, Buckingham Wealth Partners' Jeffrey Levine describes the beneficiary and distribution rules for inherited IRAs. Watch more episodes of Ask The Hammer at this link: https://www.finstream.tv/videos/ask-the-hammer/
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