Inherited IRA
In the past, anyone inheriting an IRA (non-spousal) could “stretch” distributions and tax payments over their life expectancy. However, the 2020 SECURE Act changed this option and now requires that the balance of an inherited IRA to be withdrawn within 10 years after the death of the IRA owner or retirement plan participant1.
NOTE: If you inherited an IRA account before January 1, 2020 and started taking distributions, you are considered “grandfathered” and can continue taking distributions over your expected lifetime.
Consult a tax professional on how Required Minimum Distributions (RMDs) may affect you.
1If you are a surviving spouse, chronically ill, disabled, or less than 10 years younger than the deceased account owner then you are exempt from the 2020 SECURE Act rule. This exemption also applies to minor children of the deceased account owner. Once the minor child reaches age 18, then the balance of the account must be withdrawn over a ten-year period.