dmertz
Level 15

Retirement tax questions

As an EDB maintaining the traditional IRA as an inherited IRA, your annual beneficiary RMDs will begin with 2024 and that first beneficiary RMD will have to be completed by December 31, 2024.  Completing your husband's 2023 RMD, while being paid to you as beneficiary, is not a beneficiary RMD, it's his RMD.  The change to age 73 does not apply because that change only applies to those IRA participants reaching age 72 after 2022.  Even if the change to age 73 did apply, that wouldn't change the fact that your beneficiary RMDs begin in 2024, the year after he would have reached age 73.  If you choose to treat the IRA as your own, you will not have any RMDs until the year you reach age 75 (the RMD age changes to 75 in 2033).

 

Regarding the Roth IRA, if you treat the Roth IRA as your own, at any time you can take out any amount up to the amount of his contributions without tax or penalty.  If you maintain the Roth IRA as an inherited Roth IRA for you as beneficiary you can take out any amounts (including cashing out the entire amount) without tax or penalty at any time.  If you maintain the Roth IRA as inherited you'll have the choice to take annual RMDs as an EDB or you can opt into the 10-year rule with no annual RMDs.  If you opt into the 10-year rule, when you reach age 59½ (which will be prior to 2033) you can assume ownership so that you will not have to take a distribution of the entire amount in 2033.

 

Regardless of what you do, make SURE that any movement of funds between traditional IRA accounts or between Roth IRA accounts is done by nonreportable trustee-to-trustee transfer, NOT by distribution and rollover.