It's a lot to wrap your head around. I mean, one minute you're dealing with the loss of a loved one, and the next, you're trying to figure out complex tax laws.
So I think I follow (maybe) :) I die at 76 so my RMDs from my 401(k) have already started. My wife is 14 years younger and gets my 401(k) when she's 62. I understand that she needs to continue to take MY RMDs through the year I died. But I get confused what my wife needs to do the following year (and using that table) So her RMDs are calculated based on IRS Life Exp Table. So she'll then be 63 and according to that table it's 24.5 Meaning there is $1mil left in her inherited 401(k), she's required to take a minimum of $40,816 per year BUT has to deplete the entire $1mil in 10 years? Does that sound right? I'll be shocked if I am haha
Why does an inherited ROTH IRA also have to be closed out within 10 years. Also Fidelity says you have to take an RMD on the inherited ROTH too, they said the inherited person does not get the same benifits as the original owner of the account. Doesn't make sense.
Thank you for your question. Yes. Required Minimum Distributions for Beneficiary IRAs can be quite confusing. Recently (July 2024), the IRS did provide some clarification to their rules along with a few new proposals. You may be eligible to not take RMDs from a ROTH Bene IRA based on 1) when the original owner passed and 2) depending on if they were already taking RMDs before they passed. There are possibly some additional considerations that are beyond the scope of this platform. Feel free to call our office to see if we can help clarify things more for your particular situation. Thanks for watching!
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It's a lot to wrap your head around. I mean, one minute you're dealing with the loss of a loved one, and the next, you're trying to figure out complex tax laws.
Really? That's great. I've been thinking about getting some professional advice.
So I think I follow (maybe) :) I die at 76 so my RMDs from my 401(k) have already started. My wife is 14 years younger and gets my 401(k) when she's 62. I understand that she needs to continue to take MY RMDs through the year I died. But I get confused what my wife needs to do the following year (and using that table) So her RMDs are calculated based on IRS Life Exp Table. So she'll then be 63 and according to that table it's 24.5 Meaning there is $1mil left in her inherited 401(k), she's required to take a minimum of $40,816 per year BUT has to deplete the entire $1mil in 10 years? Does that sound right? I'll be shocked if I am haha
Why does an inherited ROTH IRA also have to be closed out within 10 years. Also Fidelity says you have to take an RMD on the inherited ROTH too, they said the inherited person does not get the same benifits as the original owner of the account. Doesn't make sense.
Thank you for your question.
Yes. Required Minimum Distributions for Beneficiary IRAs can be quite confusing. Recently (July 2024), the IRS did provide some clarification to their rules along with a few new proposals.
You may be eligible to not take RMDs from a ROTH Bene IRA based on 1) when the original owner passed and 2) depending on if they were already taking RMDs before they passed.
There are possibly some additional considerations that are beyond the scope of this platform. Feel free to call our office to see if we can help clarify things more for your particular situation.
Thanks for watching!
What about Inherited Roth? The rules are not clear on an RMD vs 10 year lump.
Thanks for watching, @wrgreger! Roths must be fully distributed by the 10th year. There are no RMD requirements with inherited Roth IRAs.