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Navigating Required Minimum Distributions for Inherited IRAs: A Guide for Beneficiaries 


This article offers an essential overview for beneficiaries on how to manage Required Minimum Distributions (RMDs) from inherited workplace retirement accounts and IRAs, reflecting the latest regulations and options available. 

Navigating the complexities of Required Minimum Distributions (RMDs) from inherited retirement accounts demands an informed approach. This article provides essential guidance for beneficiaries managing inherited IRAs and workplace retirement accounts, incorporating the latest regulations to ensure compliance and tax optimization. 

Understanding RMD Rules 

RMDs are minimum amounts that must be withdrawn annually from inherited retirement accounts post the original owner’s death. Inheriting a retirement account brings specific obligations under the law. Beneficiaries must understand RMDs—minimum amounts that must be withdrawn annually. These rules vary significantly based on several factors: 

  • The type of inherited account. 
  • The age of the original account holder at the time of their passing. 
  • The relationship between the beneficiary and the deceased. 

Beneficiary Designations and Distribution Options 

It’s crucial to know who qualifies as a beneficiary and the distribution options available to them, including lump-sum distributions and withdrawals over time. These options are influenced by the SECURE Act of 2019, which brought significant changes to RMD regulations for inherited accounts. 

The timing for required minimum distributions (RMDs) for beneficiaries is influenced by several factors regarding the withdrawal from an inherited retirement account. These factors include: 

  • Whether the account owner died before or after 2019. 
  • The nature of the beneficiary’s connection to the deceased account holder, along with specific traits of the beneficiary that may affect RMD regulations. This includes different considerations for spouses, minors, those with disabilities, or beneficiaries who are not individuals. 
  • Whether the original account owner died before or after their required beginning date (the date the original account owner was required to begin taking RMDs). 

SECURE Act and Its Impact 

The SECURE Act, enacted in 2019, altered the landscape for beneficiaries of inherited retirement accounts, particularly affecting the timing and manner of RMDs. The SECURE Act didn’t change the RMD requirements for beneficiaries of an account owner who died before 2020 or for beneficiaries that are not individuals. 

Distribution Options Detailed 

Spousal beneficiaries have options such as rolling over the account into their own IRA, while non-spousal beneficiaries are subject to stricter timelines. Distribution options vary, offering both challenges and opportunities for tax planning: 

For spouses inheriting accounts before the Required Beginning Date (RBD): 

  • May retain the account as an inherited one, enabling: 
  • Deferral of distributions until the deceased would have reached age 72, 
  • Option for distributions based on the surviving spouse’s life expectancy, 
  • Compliance with the 10-year distribution rule. 
  • Possibility to transfer the account into their own IRA, subject to a 10% penalty for withdrawals before age 59 1/2. 

For spouses inheriting accounts after the RBD: 

  • Can keep the account as an inherited one with distributions based on their life expectancy, 
  • Have the option to roll the account into their own IRA. 

For non-spousal beneficiaries from 2020 onwards, options vary by eligibility: 

  • Eligible designated non-spouse beneficiaries include: 
  • The deceased’s minor children, 
  • Individuals with disabilities or chronic illness, 
  • Those not more than 10 years younger than the deceased. 
  • Eligible designated beneficiaries may: 
  • Opt for distributions over the longer of their or the deceased’s remaining life expectancy, or 
  • Adhere to the 10-year rule if the account holder passed before reaching RBD. 

Non-eligible designated beneficiaries are required to follow the 10-year rule for distributions. 

Note.  The owner of a Roth IRA is not required to take RMD’s.  However, individuals who inherit a Roth IRA are subject to the RMD rules.  Designated Roth accounts in a 401(k) or 403(b) plan are subject to the RMD rules for tax years 2022 and 2023.  For 2024 and later years, RMDs are no longer required from such designated Roth accounts. 

This guide underscores the necessity for beneficiaries to navigate these rules with precision. By understanding and applying the latest guidelines, beneficiaries can manage inherited assets effectively, avoid common pitfalls, and potentially enhance their tax situation. If you have any questions, please feel free to contact us.


Original insights were drawn from the Federal Tax Update Staff’s work on “Client Update: Taking RMDs from Inherited Retirement IRA Accounts” dated 02/12/2024, courtesy of Thomson Reuters/Tax & Accounting.