Permalink Submitted by mk foss on Mon, 2010-09-27 20:59
When a non-spouse beneficiary inherits a Roth IRA there are two choices for RMDs. The default is life expectancy (which is the best). The Roth beneficiary could also use the 5-year rule. That rule doesn’t specify an specific amount each year – just that the account must be emptied by 12/31 of the year that contains the five year anniversary of the original owner’s death.
When a non-spouse beneficiary inherits a traditional IRA from someone who is not receiving RMDs – the rules are the same as for the Roth above. If the original owner was receiving RMDs – then life expectancy is the only choice. You would use the age of the owner of the account if the owner was younger than the beneficiary – but that doesn’t happen very often.
Permalink Submitted by mk foss on Mon, 2010-09-27 20:59
When a non-spouse beneficiary inherits a Roth IRA there are two choices for RMDs. The default is life expectancy (which is the best). The Roth beneficiary could also use the 5-year rule. That rule doesn’t specify an specific amount each year – just that the account must be emptied by 12/31 of the year that contains the five year anniversary of the original owner’s death.
When a non-spouse beneficiary inherits a traditional IRA from someone who is not receiving RMDs – the rules are the same as for the Roth above. If the original owner was receiving RMDs – then life expectancy is the only choice. You would use the age of the owner of the account if the owner was younger than the beneficiary – but that doesn’t happen very often.