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.