IRS Finalizes 10-Year Rule for Inherited IRAs

The IRS has finally released its final interpretation of the 10-year rule for inherited IRAs.

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Mike Bernard, CFP® offers advisory services through KFG Wealth Management, LLC dba Korhorn Financial Group. This information is for general financial education and is not intended to provide specific investment advice or recommendations. All investing and investment strategies involve risk, including the potential loss of principal. Asset allocation & diversification do not ensure a profit or prevent a loss in a declining market. Past performance is not a guarantee of future results.
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

[gingerkilkus]

I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement in 3 years.

[rkgatteleport]

Ok, so does this apply to an inherited Roth, or is it still under the "the Roth must be emptied by the 10th year and we don't care when it is withdrawn" rule?

[cube]

To confirm, this final ruling only applies to inherited IRAs starting 2020 and later. If you inherited one in say 2015 from someone who had started the RMDs and you have continued them, there is NO 10-year rule to empty that IRA?

[artbaer]

At whose age is the RMD computed for an inherited regular and Roth IRA? For example: Parent already is paying annual RMDs at their age (74) on their Regular IRA. Parent dies and two children inherit both the Regular and the Roth IRAs. One child is 40, the other child is 37. When the children split both IRAs, at whose age (original Parent, or, children's age) will the annual RMDs be computed for the next 10 years? Thanks