This is very testable on the Series 7 exam.
The rules for inheriting an IRA changed with the SECURE act. Not as much if you are a spouse but very different for most others who inherit an IRA….(read more)
LEARN MORE ABOUT: IRA Accounts
TRANSFER IRA TO GOLD: Gold IRA Account
TRANSFER IRA TO SILVER: Silver IRA Account
REVEALED: Best Gold Backed IRA
Inherited IRA (Individual retirement account) is an account that is passed down from one person to another upon death. The new rules for Inherited IRA have been put in place to protect the assets of the deceased and ensure that the beneficiary is able to access the funds in a timely manner.
Under the new rules, the beneficiary must begin taking withdrawals from the Inherited IRA no later than the end of the year following the year of the original owner’s death. This is known as the “required minimum distribution” (RMD). The amount of the RMD is based on the age of the original owner and the value of the Inherited IRA.
If the beneficiary is a spouse, they may roll the Inherited IRA into their own IRA and defer taking the RMD until they reach the age of 70 ½. If the beneficiary is not a spouse, they are not allowed to roll the Inherited IRA into their own IRA and must begin taking the RMDs immediately.
In addition, the beneficiary must also pay taxes on any withdrawals they make from the Inherited IRA. The tax rate is based on the beneficiary’s income and the type of account (traditional or Roth).
Finally, the beneficiary must name a contingent beneficiary in the event that they pass away before taking all of the RMDs. This ensures that the assets are passed on to the next generation in accordance with the original owner’s wishes.
These new rules for Inherited IRA are important for beneficiaries to understand in order to ensure they are able to access the funds in a timely manner and pay the appropriate taxes. It is also important for investors to be aware of these rules in order to make sure that their assets are passed on in accordance with their wishes. #series7exam #series66exam
Hope your power is on during the storm. why did i think one had to withdraw the inherited IRA within 2 years?
Just passed the 7 today. I had 2 questions on spousal IRA. One was just saying you have to take it by year 10. Didn’t bring up a little each year. Next one was, what is it called. One option was spousal IRA and 1 answer given was inheritance