What is an Inherited IRA?
If you are named as a beneficiary of the IRA of someone who has died, the amount you inherit becomes an Inherited IRA. The rules that apply to Inherited IRAs differ depending on the type of IRA you inherit and whether you are the spouse of the deceased IRA owner.
What are the rules if I inherit a Traditional IRA from a spouse?
If your deceased husband or wife named you as the beneficiary of their Traditional IRA, you have several choices.
If you are the only named beneficiary, you can treat the IRA as your own, and designate yourself as the account owner. This will allow you to make additional IRA contributions each year, and you will be taxed on the money in the account only when you withdraw it.
As a spouse, you also have the choice, even if you are not the sole beneficiary, of treating yourself as the beneficiary of the IRA, or rolling the inherited IRA money into your own IRA or into retirement plan sponsored by an employer that accepts rollover IRA contributions. To avoid paying income taxes you must roll the contribution into your own IRA or another retirement plan within 60 days.
What if I inherit a Traditional IRA from someone other than a spouse?
If you inherit a Traditional IRA from someone other than your spouse, you cannot treat the IRA as your own and you must request distributions from the IRA based on your life expectancy and pay income taxes on those distributions each year. To find out when you must take a distribution and how much you must withdraw each year, see IRS Publication 590.
What if I inherit a Nondeductible IRA or a Roth IRA?
Different rules apply to Nondeductible IRAs and Roth IRAs since income taxes have already been paid on the money contributed to the IRA. See IRS Publication 590.
What if the estate of the individual who died paid taxes on the money in the IRA?
If estate taxes were paid on the money in the IRA an individual may be able to claim an income tax deduction for payments that person receives from the Inherited IRA each year. See IRS Publication 559.
Looking for help with your retirement plan?
If you have a problem with your retirement plan, free help may be available from the U.S. Administration on Aging's network of Pension Counseling and Information Projects. Find help now.
What's your story?
We're hearing from people around the country who are worried about cuts to their pensions. These are their stories.
PensionHelp America connects people who need help with their pension, 401(k), and other retirement plans with the pension counseling projects, legal services providers, and government agencies that can help answer their questions. Visit www.pensionhelp.org.
Roadmap to retirement
Let our roadmap to helpful information about retirement plans for private-sector workers put you on the path toward a secure retirement. Get started.
Get E-mail Updates
Did You Know?
A joint-and-survivor annuity is an annuity that pays a monthly benefit over the lives of the participant and his or her surviving spouse. This is the default form of benefit for married participants in most defined benefit pension plans. Because it lasts for the life of both the worker and the spouse, a joint-and-survivor annuity typically results in a lower monthly benefit payment than a single-life annuity.