IRA/Roth duration

Submitted by Michael Eastham on Wed, 2018-01-17 21:29

How many times can someone pass on an IRA or Roth and have it maintain its tax deferred benefit?
In other words, If i die, my beneficiary inherits it and it maintains tax benefits (subject to RMD), then what happens after my beneficiary dies? can he pass it to a beneficiary who will inherit and continue to stretch it out over his lifetime? When does it end and what is the process when it does?
Thanks



Submitted by David Mertz on Wed, 2018-01-17 21:59

A successor beneficiary must continue the RMDs that would have been required of the original beneficiary had the original beneficiary continued to live; successor beneficiaries do not get a new calculation.  Taking no more than the RMD, the IRA will become exhausted at the same point as it would have had the original beneficiary lived long enough.

Submitted by Alan - IRA critic on Wed, 2018-01-17 22:18

  • For unlimited duration, leave the IRA to a younger spouse who rolls it over then leaves it to yet another younger spouse who rolls it over again etc.. Duration unlimited but balance will grow much more if the rollovers are done before RMDs or early in the RMD cycle.
  • Once the IRA is left to a non spouse, the duration is limited but would still be 82 years if left to a 1 year old.

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