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Have you recently inherited a retirement plan account? An Inherited IRA may be right for you.

Individual Retirement Accounts (IRAs):
An Individual Retirement Account (IRA) is a custodial account created to provide a simple tax-advantaged way to accumulate funds for retirement.

An inherited IRA (or beneficiary IRA) is a type of IRA that is opened by an IRA beneficiary when inheriting a retirement plan account following the account owner's death. The IRS has outlined rules governing the handling of inherited IRAs as it relates to contributions and withdrawals. Generally, the rules vary depending on if the inheritor is a spousal heir or a non-spouse heir.

INHERITED IRA:
If you inherit a retirement plan account, you are considered a "beneficiary". A beneficiary may open an inherited IRA to receive the proceeds from the distribution of the prior account. The rules governing inherited IRAs can be complicated, and we recommend speaking with a tax advisor to fully understand your options and requirements.

Inheriting from a spouse
If you inherit the account from your spouse, you have more flexibility than a non-spouse beneficiary. You can treat the IRA as your own if you are the sole beneficiary, or you can roll all or part into your own inherited IRA. Keep in mind that if the original owner was taking Required Minimum Distributions ("RMDs") from the IRA, then the RMD due for the year of death must still be taken.

Inheriting from a non-spouse
If you inherit an IRA from a non-spouse, you have fewer options. You must open an inherited IRA to receive the proceeds of the distribution, and you cannot treat the IRA as your own, meaning you cannot contribute to the inherited IRA or roll over the assets into an IRA in your own name. Non-spouse beneficiaries generally are required to distribute the assets of the inherited IRA within 10 years of the original owner's date of death,with certain exceptions for beneficiaries no more than 10 years younger than the original owner, minor children of the original owner, and those who are chronically ill or disabled. The rules for non-spouse beneficiaries are complex and have recently changed, so you should speak with a tax advisor.

OPEN AN INHERITED IRA

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Reach our IRA specialists at
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For answers to commonly asked questions regarding IRAs, please review our IRA FAQs page.


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