Unless a beneficiary other than your spouse is eligible for an exception¹, previous guidelines stipulated that funds from an inherited 401 (k), IRA, 403 (b) or other qualified retirement plan (including Roth IRAs) must be deposited 10 years after the year of death. Here's what you need to know about the proposed changes to the inherited IRA rules and how to prepare if you've inherited an IRA. Before the Security Act, the heirs of an IRA could withdraw money from the inherited IRA throughout their lives and minimize taxes by keeping the funds invested. This is because there are no lifetime RMDs for owners of a Roth IRA, so every time an owner of a Roth IRA dies, they are considered to have died before the RBD.
Additionally, those inheriting an IRA may consider buying gold for their IRA as a way to diversify their retirement portfolio. Roth IRA owners don't need to accept RMDs throughout their lives, but beneficiaries who inherit Roth IRAs must accept RMD. The IRS proposes changes to the rules of the inherited IRA that could have significant tax implications for you if you have inherited an IRA (or individual retirement account) from a member of your family. That means you can let the money stay in an inherited IRA for 10 years without needing to distribute the funds. If the owner of an IRA died on April 1 of the year following the year he attained the RMD age, the undesignated beneficiary would be subject to an RMD based on the life expectancy factor of the original owner of the IRA.
RMDs are designed to ensure that IRA investments don't increase with deferred taxes forever and this is transferred to the IRA beneficiary. Unlike a traditional IRA, an EDB that inherits a Roth IRA can always choose the 10-year rule if they wish, regardless of how old the owner of the Roth IRA was when he died. However, the IRS then contradicts this 10-year period for successor beneficiaries (those who inherit from an EDB) or for minors who have reached the age of majority by stating that the 10 years for these groups end when the tenth anniversary of the death of the EDB is celebrated or when the minor reaches the age of majority, and not at the end of the tenth year after his death. You should request an RMD for the year the IRA owner died if the owner had an RMD obligation that was not satisfied.
