Inherited IRA’s
A man is 56 and inherited an IRA from his mother. She was making Required minimum distributions and he is taking a stretch IRA. If his amount is $21K per year distribution can he take more than that in a given year and then return to the $21K again thereafter? Or will he be somehow penalized for taking out more?
Also does it matter if here were 60 years old?
Permalink Submitted by Alan - IRA critic on Fri, 2013-12-20 00:05
His RMD may be 21k in the current year, but that will change every year. His divisor will reduce by 1.0 each year and the year end account balance will change, so his RMD must be recalculated every year. He is free to take out as much as he wishes without penalty, and a large distribution will reduce his year end balance and therefore lower all remaining RMDs. The only penalty is for failing to take out at least the RMD as a minimum.