Inherited Roth IRAs and Roth Conversions: Today’s Slott Report Mailbag

Thursday, September 10, 2020

By Sarah Brenner, JD
Director of Retirement Education
Follow Us on Twitter: @theslottreport

Question:

Does the SECURE Act have any implication to Roth IRA account inheritance longevity? Please let me know.  Thank you.

Regards,

Vikram

Answer:

Hi Vikram,

The SECURE Act does affect inherited Roth IRAs in the same way it affects inherited traditional IRAs. Most beneficiaries who inherit a Roth IRA in 2020 or later will be subject to a 10-year payout period.

Question:

Hi Ed,

I just want you to know that I have all of your books which I refer to whenever I have a question about IRAs or retirement planning. However, there is one subject I could not find an answer to in any of your books.

My wife has a traditional IRA, but she does not have a Roth IRA. She has been retired for a number of years now, and would like to open a Roth IRA with a conversion from her traditional IRA. Can she do this?

Thank you,

Tony

Answer:

Hi Tony,

This is a question that seems to come up frequently. While there is a requirement that an individual (or their spouse) have earned income to make a tax year contribution to a traditional or Roth IRA, there is no such requirement to do a conversion. An individual with no earned income can convert an existing traditional IRA to a Roth IRA with no issues.

 

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