Question & Answers

What is the proper way to set up an inherited IRA? I was told that I have to make annual withdrawals. Is that correct?

0 Votes
Oct 21, 2009 by Academix
Category: Financial Planning

Thomas J. Hartfield
0 Votes
Advisor: Thomas J. Hartfield, Financial Advisor
Oct 26, 2009  
You have a few different choices if you are the beneficiary of an IRA account and your IRA distribution options available generally depend on whether the IRA owner died before or after April 1st of the year following the year in which he or she turned age 70 1/2. There is using Separate Shares for Multiple Beneficiaries and there is also the five-year rule. You definitely want to give this some serious thought as distribution elections are irrevocable. You will also hear the term Stretch IRA. At this point I have more questions than I can provide info answers to as there are a few different options you have depending on the specific situation. Feel free to contact should you require assistance. Disclaimer: I am a Financial Advisor and can not provide tax advice and strongly suggest you consult with a Tax Advisor.
Zubin JB
0 Votes
Advisor: Zubin JB, Financial Advisor
Oct 26, 2009  
It depends if the IRA is from a spouse or non-spouse - different rules apply. And one needs to be really careful in making the correct decision as you could be liable for a big tax bill if it is not done properly. The article mentioned in the previous answer is a good starting step. HOWEVER, it is a very complex issue, and should be handled with care, especially if the IRA is a meaningful amount.
Kerry Freeman EA
1 Votes
Advisor: Kerry Freeman EA, IRS Tax Relief
Oct 26, 2009  
Here are the most common options.

1. Total distribution

2. Based on the longer of yours or deceased/owners life expectancy.

The spouse might have other options to explore.
Art Of Saving
0 Votes
Advisor: Art Of Saving, Personal Finance
Oct 23, 2009  
There is a great article on our Forum that will answer your questions -