What You Should Know About Inherited IRAs

I was quoted recently in an article published in the U.S. News and World Report. The article was titled, "What You Should Know About Inherited IRAs."

The article had three main points of emphasis. 

First, it discussed what happens when a surviving spouse inherits an IRA. Generally, the surviving spouse, for Required Minimum Distribution purposes, can treat the IRA as his or her own IRA and postpone taxable distributions until that surviving spouse reaches the age of 70.5

Second, if a non-spouse is designated as a designated beneficiary of the IRA (typically, a child or children), then the non-spouse beneficiary must start taking distributions the year after the original IRA owner's death. This occurs even if the beneficiary is less than 59.5. The distribution is calculated based on the life expectancy of the beneficiary.

Third, the article addresses how the beneficiary is not bound to the investment decisions made by the original IRA owner. The beneficiary can alter the investments in the IRA or Inherited IRA.