Knowledge is power.
We empower our clients.

Get Started Now
<< Back to Helpful Tips

Inheriting an IRA – The Rules Have Changed

According to a recent survey of 6,000 U.S. households, about 60% said they have received, plan to get, or intend to give inheritances compared to 46% recorded seven years prior.*

Anyone can inherit an Individual Retirement Account (IRA). Depending on your relationship with the original account owner and when that person died, different withdrawal rules and tax implications apply:

Your Withdrawal Options with an Inherited IRA

Eligible Designated Beneficiary**
(most commonly a Spouse)

  • Transfer the assets to your own IRA (spouses only).
  • Open an Inherited IRA and take distributions over time depending on if the original accountholder was under or of RMD age at the time of death.
  • Take a lump-sum distribution subject to ordinary income tax.
  • In certain circumstances, decline the account.
Designated Beneficiary
 

Inherited before 2020:

  • Transfer funds into a new Inherited IRA and take withdrawals based on your life expectancy as beneficiary (so called “stretch IRA”).
  • Take a lump-sum distribution subject to ordinary income tax.
  • In certain circumstances, decline the account.

Inherited after 2020:

  • Open an Inherited IRA and take distributions within 10 years. Minimum distributions each year during the 10-year period might be required depending on whether the original account owner started taking RMDs.
  • Take a lump-sum distribution subject to ordinary income tax.
  • In certain circumstances, decline the account.

*“More Americans Are Leaving Inheritances — and It’s Not Just Wealthy People,” 4/12/23, Money.com. **An eligible designated beneficiary includes the surviving spouse, minor children, individuals who are chronically ill or disabled and any person who is not more than 10 years younger than the IRA owner.

The rules around Inherited IRAs can be complex. A Jemma Financial Advisor can help you understand your options so that you can get the most out of your retirement account. Click here to speak with a Jemma Financial Advisor.

spouse-ira-banner Does a Spousal IRA Make Sense for Your Family? Businessman Calculating Invoice On Desk 3 Questions to Ask When Investing Your 401(k) Funds Pebble stack 10 Ways to Make the Most of Your Money
Log In to Your Existing Account Get Started Now

Need assistance? Call 855.662.2121 or email info@jemmafinancial.com

You are now leaving Jemma Financial

Yes, I would like to leave No, I would like to stay

Important Notice

You are now leaving the Jemma Financial Services website and will be entering the Charles Schwab & Co., Inc. (“Schwab”) website.

Schwab is a registered broker-dealer, and is not affiliated with Jemma Financial Services or any advisor(s) whose name(s) appear(s) on this website. Jemma Financial Services is/are independently owned and operated. [Schwab neither endorses nor recommends {Name(s) of Investment Management Firm(s)}, unless you have been referred to us through the Schwab Advisor Network®. (This bracketed language is for use by Schwab Advisor Network members only.)] Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with “Name(s) of Firm(s)” under which Schwab provides Jemma Financial Services with services related to your account. Schwab does not review the Jemma Financial Services website(s), and makes no representation regarding information contained in the Jemma Financial Services website, which should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.

IMPORTANT NOTICE

You are now leaving the Jemma Investment Advisors, LLC Website and will be entering the Charles Schwab & Co., Inc. ("Schwab") Website. Schwab is a registered broker-dealer, and is not affiliated with Jemma Investment Advisors, LLC, or any advisor(s) whose name(s) appears on this Website. Jemma Investment Advisors, LLC is independently owned and operated. Schwab neither endorses nor recommends Jemma Investment Advisors, LLC. Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with Jemma Investment Advisors, LLC under which Schwab provides Jemma Investment Advisors, LLC with services related to your account. Schwab does not review the Jemma Investment Advisors, LLC Website, and makes no representation regarding the content of the Website. The information contained in the Jemma Investment Advisors, LLC Website should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.

Continue to Schwab

This will close in 0 seconds