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Taking Distributions From Inherited IRAs

How Do I Draw Down Money From An Inherited IRA

Types of Distributions

When you inherit an IRA from someone you will have to choose how you would like to take it. There are several options when this happens, so I thought I would take a few minutes to explain them. If you are a non-spouse beneficiary, you have the following three options:

  • Lump sum distribution
  • Distribution over 5 years
  • Lifetime distribution (if you choose this option, your age will be plugged into the life expectancy table each year to determine the amount of your distribution)

Distributions Based On Beneficiary Types

If you are a spouse beneficiary, you have the above options and you will also have the option to treat the IRA as your own. In this scenario, you will take over the IRA in your own name and you will be able to contribute to the IRA, take distributions and invest, just as if it were your own IRA.

If you have questions, please speak with your CPA or tax professional.

 Here’s another good article that I came across that discusses Inherited IRAs:

Non-Spouse Inherited IRAs: How to Avoid Making Common Mistakes