Inherited Ira Vs Spousal Rollover

If the inherited traditional ira is from anyone other than a deceased spouse the beneficiary cannot treat it as his or her own.

Inherited ira vs spousal rollover. If you inherited a traditional ira from your spouse there are two primary types of iras you can inherit a traditional ira or a roth ira. A spouse who inherits an ira has a choice. The result is the same as rolling the ira over to an existing ira of the surviving spouse. If you are the law allows you to roll over the inherited ira into your own ira.

This means that the beneficiary cannot make any contributions to the ira or roll over any amounts into or out of the inherited ira. If you re a non spouse beneficiary the situation becomes more complicated and less favorable. A surviving spouse is not required to rollover an inherited ira. If you inherited an individual retirement account ira from someone other than a spouse a different set of rules would apply.

Money sense e newsletter each week zack s e newsletter will address topics such as retirement savings loans mortgages tax and investment strategies and more. This is the default option under the tax rules if the spouse is the sole beneficiary with an unlimited right to withdrawals. This situation occurs when the surviving spouse is the named beneficiary on the. Inherited from someone other than spouse.

He designates himself as the ira owner with the financial institution that is custodian of the account. In this case you re treating the situation the same as if you were a non spouse beneficiary. This allows you to delay taking required minimum distributions or rmds until age 70 1 2. This is the special provision that spouses can use that a non spouse beneficiary cannot.

Or she can choose to roll the account into her own ira. Of course only a sole spousal beneficiary can assume ownership of an inherited ira. 31 of the year following the original ira owner s death. Rollover the ira to an inherited ira see this post for more information.

Inheriting a 401 k vs. The surviving spouse can move the account into an inherited ira to keep the tax shelter. If the inherited ira was a roth ira instead of a traditional ira the above comments hold true. A spouse can treat an inherited ira as his own account.