IRA Withdrawals

Making financial decisions after losing someone you care about can make a difficult time even harder. We understand and we're here to help.

We’ve summarized some general information about IRA withdrawal rules. If you need more specific information concerning your individual financial situation, please consult with a financial planner or tax advisor. Dodge & Cox doesn’t offer financial planning or tax advice, and the information provided isn’t intended to be a complete summary of all the rules that apply.

If you inherit an IRA or retirement plan account following the death of the original owner, you’re eligible to open an inherited or beneficiary IRA. If you‘re a beneficiary, it’s important to understand the rules and requirements to avoid fees or penalties from the Internal Revenue Service (IRS).

The Setting Every Community Up for Retirement Enhancement Act of 2019 ("SECURE Act") revised many of the required distribution rules for inherited IRAs. Primarily, your options on what you may do with the account you’re inheriting depend on whether the original account owner was your spouse or not.

Inheriting from a spouse

When you’re inheriting an IRA or retirement plan account from a spouse, you have more options. If it’s an IRA, you can treat the account as your own if you are the sole beneficiary of the IRA, or you can roll over retirement plan or IRA assets into an IRA for yourself, and the assets will be treated as if they were yours to begin with. Please note, the time when you need to begin taking distributions may vary depending upon whether you structure the IRA as an inherited IRA or elect to treat it as your own.

Inheriting from someone other than a spouse

Generally, distributions from a retirement account for a beneficiary must be made within 10 years after the death of the account owner. There are exceptions to this rule, including if you are an "eligible designated beneficiary," in which case you may be able to stretch out the distributions over your lifetime.

The following are considered eligible designated beneficiaries:

• You’re the surviving spouse of the original account owner. 
• You’re a minor child of the original account owner. Please note generally, once the minor child beneficiary reaches the age of majority, the rules change and the account must be distributed within 10 years from that point.
• You’re disabled or chronically ill (as defined in the tax code).
• You’re any other individual not more than 10 years younger than the decedent. 

If you designated a beneficiary that’s not an individual—for example, a charity—then distributions generally must be made within five years of your death. Certain trusts are exempt from the five-year distribution rule.

Get the form you need to make a withdrawal.