Inherited IRA distribution rules [spouse and non-spouse beneficiaries’ guide]

You transfer the assets into your own existing or new IRA

At any time, but a penalty will apply to withdrawals made before you reach age 59½.

Only available if you are the sole beneficiary. IRA assets can continue growing tax-deferred.

If you are under 59½ you'll be subject to the same distribution rules as if the IRA had been yours originally, so you cannot take distributions without paying the 10% early withdrawal penalty — unless you meet one of the IRS penalty exceptions.

You may designate your own IRA beneficiary.

You transfer the assets into an Inherited IRA held in your name.

Required Minimum Distributions (RMDs) are mandatory, and you have the option to postpone distributions until the later of:

The year in which the decedent would have attained age 73, or 12/31 of the year following the year of death.

Distributions must begin no later than 12/31 of the year the account holder would have reached 73.

Your annual distributions are spread over your single life expectancy, which is determined by your age in the calendar year following the year of death and reevaluated each year.

If multiple beneficiaries, separate accounts must be established by 12/31 of the year following the year of death; otherwise, distributions will be based on the oldest beneficiary.

Required Minimum Distributions (RMDs) are mandatory and you are taxed on each distribution. You will not incur the 10% early withdrawal penalty.

Undistributed assets can continue growing tax-deferred. You may designate your own IRA beneficiary.

You transfer the assets into an Inherited IRA held in your name.

RMDs must begin no later than December 31 of the year after death.

Your annual distributions are spread over the beneficiary's single life expectancy determined by your age in the calendar year following the year of death and reevaluated each year.

Note: If the Eligible designated Beneficiary is the minor child of the deceased account holder, the life expectancy method of distribution is no longer available when the child turns age 21.

At that point, the distribution option is required to switch to the 10-year method below and all remaining assets need to be distributed by the end of the 10th year after the minor turns age 21.

If multiple beneficiaries, separate accounts must be established by 12/31 of the year following the year of death; otherwise, distributions will be based on the oldest beneficiary.

Required Minimum Distributions (RMDs) are mandatory and you are taxed on each distribution.

You will not incur the 10% early withdrawal penalty.

Undistributed assets can continue growing tax-deferred.

You may designate your own IRA beneficiary.

The assets are transferred into an Inherited IRA held in your name.

At any time up until 12/31 of the tenth year after the year in which the account holder died, at which point all assets need to be fully distributed.

You are taxed on each distribution.

You will not incur the 10% early withdrawal penalty.

Undistributed assets can continue growing tax-deferred for up to ten years.

You may designate your own IRA beneficiary.

None. All assets in the Inherited IRA are distributed to you.

All at once.

You will not incur the 10% early withdrawal penalty.

You may move to a higher tax bracket depending on the amount of the distribution and your current income level.

You transfer the assets into an Inherited IRA held in your name.

RMDs must start by December 31 of the year after death.

NOTE! If the original account holder did not take an RMD in the year of death, an RMD must be taken from the account by 12/31 of the year the original account holder died.

Your annual distributions are spread over your single life expectancy (determined by your age in the calendar year following the year of death and reevaluated each year) or the deceased account holder's remaining life expectancy, whichever is longer.

Note: If the Eligible designated Beneficiary is the minor child of the deceased account holder, the life expectancy method of distribution is no longer available when the child turns age 21.

At that point, the distribution option is required to switch to the 10-year method below and all remaining assets need to be distributed by the end of the 10th year after the minor turns age 21.

If there are multiple beneficiaries, separate accounts must be established by 12/31 of the year following the year of death; otherwise, distributions will be based on the oldest beneficiary.

Required Minimum Distributions (RMDs) are mandatory and you are taxed on each distribution.

You will not incur the 10% early withdrawal penalty.

Undistributed assets can continue growing tax-deferred.

You may designate your own beneficiary.

None. All assets in the IRA are distributed to you.

All at once.

You will pay income taxes on the distribution all at once.

You will not incur the 10% early withdrawal penalty.

You may move to a higher tax bracket depending on the amount of the distribution and your current income level.

You transfer the assets into an Inherited Roth IRA held in your name.

Required Minimum Distributions (RMDs) are mandatory and distributions must begin no later than 12/31 of the year following the year of death.

Distributions are spread over the beneficiary's single life expectancy.

Note: If the Eligible designated Beneficiary is the minor child of the deceased account holder, the life expectancy method of distribution is no longer available when the child turns age 21.

At that point, the distribution option is required to switch to the 10-year method and all remaining assets need to be distributed by the end of the 10th year after the minor turns age 21.

If multiple beneficiaries, separate accounts must be established by 12/31 of the year following the year of death in order to use your own single life expectancy; otherwise, distributions will be based on the life expectancy of the oldest beneficiary.

Distributions may be taken without being taxed (provided that the five-year holding period has been met), otherwise only earnings are taxable.

You will not incur the 10% early withdrawal penalty. Undistributed assets can continue growing tax-free.

You may designate your own beneficiary.

The assets are transferred into an Inherited Roth IRA held in your name.

At any time up until 12/31 of the tenth year after the year in which the account holder died, at which point all assets need to be fully distributed.

Your distributions can be spread over time, but all assets must be withdrawn by 12/31 of the tenth year after the year in which the account holder died.

Distributions may be taken during that period without being taxed (provided that the five-year holding period has been met), otherwise only earnings are taxable.

You will not incur the 10% early withdrawal penalty.

Undistributed assets can continue growing tax-free for up to ten years.

You may designate your own beneficiary.

None. All assets in the IRA are distributed to you.

All at once.

Distributions may be taken during that period without being taxed (provided that the five-year holding period has been met), otherwise only earnings are taxable.

You will not incur the 10% early withdrawal penalty.