If someone inherits an IRA from a spouse, and treats it as an inherited IRA, and later decides they would like to roll the inherited IRA into their own IRA, is that allowed?
Thanks, Alan.
The deceased spouse passed away at age 63, in 2019.
The surviving spouse would have been 57 in 2019, and is 62.
The thought was to leave the inherited IRA as “inherited” until the surviving spouse turned at least 59.5 and could avoid the 10% early withdrawal penalty.
The hope is that, taking the assuming ownership of the IRA will eliminate the need to start RMDs when the original owner would have begun RMDs.
This all seems OK?
Yes, that is correct. Assuming ownership now would be beneficial, since the 10% penalty was eliminated at 59.5. And the surviving spouse will not have to take RMDs as the owner until age 75.
Permalink Submitted by Alan - IRA critic on Wed, 2024-08-28 13:48
Yes, there is no deadline for assuming ownership of the inherited IRA.
But the rules have changed with respect to the best time to elect ownership. To determine that, the ages of both spouses would have to be determined as of the year of death, and what year that was.