IRA

Submitted by Jennifer Poole on Wed, 2014-03-26 21:11

A lady is 68 years old (1 year 3 months) older that her late husband. He passed away and left her a traditional and Roth IRA. Is it any reason she might want to put it into her name or an inheriated IRA?



Submitted by Alan - IRA critic on Wed, 2014-03-26 21:23

  1. The only advantage of keeping the IRAs in inherited status is that RMDs would be delayed for one year because she would not have to take RMDs until her husband would have reached 70.5. That’s about 1 year later than the year SHE would reach 70.5. But this advantage disappears if she needs money from the IRAs anyway, and in that case she should roll them over to her own IRAs right away.
  2. There is a risk to her own beneficiaries if she forgets to roll them over by the year husband would have reached 70.5. Were she to pass after that year without having rolled them over, her beneficiaries would not be able to use their own life expectancy and would have to continue the wife’s inherited IRA RMDs. The wife would also be subject to Roth RMDs whereas there would be no Roth RMD if she rolled these over. Therefore, if there is any doubt about rolling these over in time, the rollovers should be done ASAP.

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