Specifics on stretch for IRA and Non-IRA
Questions with the new rules as of Jan 1st, 2020:
– Inherited IRA’s are no longer stretched, but for just 10yrs, correct?
– On inherited IRA’s, since it is only for 10yrs, they inheritor does not have to take out an RMD each year based on their age but must have the total amount distributed by the 10th anniv. of date of death, correct?
– On inherited IRA’s prior to 2020: the inheritor still has to take an RMD every year based on his/her age and it can continue being stretched beyond the 10th year, correct?
– Non-IRA stretch: still available is: take lump sum and pay taxes, 5yr deferral (no required dist.) but have to have the money out by the 5th anniv. of date of death, correct?
– Non-IRA stretch with distributions starting one year after death: The inheritor can stretch for as long as they want as long as they take a minimum distribution each year, correct?
Thank you very much,
Douglas
Permalink Submitted by Alan - IRA critic on Mon, 2021-07-19 17:10
10 years for most non spouse beneficiaries, but spouses and certain eligible designated beneficiaries still qualify for the stretch as before.
Correct. Those subject to 10 year rule have no RMDs until the 10th year, then full distribution.
Also correct. But when the beneficiary passes, the 10 year rule kicks in from there.
Yes, non qualified annuity rules were not changed by the Secure Act. Whatever stretch was available pre 2020 is still available.