My spouse passed away and left me their IRA. Should I roll it into my own IRA or keep it as an inherited IRA?

It depends on your age and whether you need access to the money. If you're over 59½, rolling into your own IRA lets you delay RMDs until age 73, make new contributions, and name your own beneficiaries. If you're under 59½ and might need to access the funds, keeping it as an inherited IRA avoids the 10% early-withdrawal penalty, which does not apply to inherited IRA distributions at any age. You can always roll it over later when you turn 59½ - for spouses this is not a permanent either/or decision.

I inherited an IRA from my parent who passed away in 2023. Do I have to take money out every year, or can I wait until year 10?

It depends on whether your parent had already started taking Required Minimum Distributions (RMDs). If they died before age 73 (before their Required Beginning Date), you do NOT need to take annual distributions - you just have to empty the entire account by December 31, 2033 (10 years after death). You can take it all in year 10 or spread it out however you want. However, if they died at age 73 or older and were already taking RMDs, you MUST take annual distributions in years 1-9 based on your life expectancy, AND still empty the account by year 10. The IRS waived penalties for missed annual RMDs from 2021-2024, but starting in 2025, the 25% penalty is enforced.

What happens if I miss a Required Minimum Distribution from my inherited IRA?

The IRS charges a 25% excise tax on the amount you were supposed to withdraw but didn't. For example, if your RMD was $10,000 and you forgot, that's a $2,500 penalty. The good news: if you correct the mistake within 2 years by taking the missed distribution and filing Form 5329, the penalty drops to 10%. Also important - the IRS waived all missed RMD penalties for inherited IRAs from 2021 through 2024 while they finalized the rules. But starting in 2025, penalties are fully enforced. Set calendar reminders and consider automating your distributions.

I inherited a Roth IRA. Do I still have to take distributions even though Roth IRAs don't have RMDs?

Yes - this surprises many people. While the original owner of a Roth IRA never has to take RMDs during their lifetime, inherited Roth IRAs DO have distribution requirements. Non-spouse beneficiaries must still follow the 10-year rule and empty the account by year 10. The big advantage is that qualified distributions from an inherited Roth are completely tax-free (as long as the original Roth was open for 5+ years). Because of that, some beneficiaries let it grow tax-free for the full 10 years and take it out near the end, while others spread withdrawals out. Spousal beneficiaries can roll an inherited Roth into their own Roth - eliminating all distribution requirements during their lifetime. The tax-free treatment makes inherited Roth IRAs a notable wealth-transfer feature of the tax code.

My sibling passed away and we're close in age. Do I get different rules than my sibling's adult children?

Yes - and this is a huge distinction. If you are not more than 10 years younger than the deceased, you qualify as an 'Eligible Designated Beneficiary' (EDB). This means you can stretch distributions over your own life expectancy instead of being forced into the 10-year window. For example, if your brother died at 65 and you're 60, you can use your life expectancy to take smaller distributions over 27+ years. Your brother's adult children, on the other hand, must follow the 10-year rule and empty the account by year 10. This is one of the few remaining 'stretch IRA' options after the SECURE Act eliminated it for most non-spouse beneficiaries.

Retirement

Inherited IRA Planning

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intermediate · $50K - $100K

When you inherit an IRA or retirement account, the rules for required distributions depend on your relationship to the original owner, when they died, and whether they had already started taking RMDs.

Choosing the wrong option can cost you tens of thousands in unnecessary taxes and penalties.

Spousal beneficiaries have the most flexibility - including rolling over to their own IRA or keeping it as inherited.

Non-spouse beneficiaries are generally subject to the 10-year rule under the SECURE Act.

Understanding your options is critical to preserving wealth.

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Key takeaways

The rules depend on your relationship to the deceased, their age at death, and whether they had started RMDs.
Spouses have the most options, including rolling the account into their own IRA or keeping it as inherited.
Most non-spouse beneficiaries fall under the 10-year rule and must empty the account by year 10.
Missing a required distribution triggers a 25% penalty (reduced to 10% if corrected promptly), enforced again starting in 2025.

The 5 Beneficiary Types (Post-SECURE Act)

After the SECURE Act (deaths on/after Jan 1, 2020), inherited IRA rules depend on your beneficiary type:

1. SPOUSAL BENEFICIARY: Most flexibility. Can roll over to own IRA (delay RMDs to 73), keep as inherited (no 10% early withdrawal penalty), convert to Roth, take lump sum, or disclaim.

2. ELIGIBLE DESIGNATED BENEFICIARY (EDB): Minor children of deceased, disabled/chronically ill individuals, and those within 10 years of the deceased's age. Can stretch over own life expectancy.

3. NON-ELIGIBLE DESIGNATED BENEFICIARY: Most common - adult children, grandchildren, siblings 10+ years younger, friends. Subject to the 10-year rule. If owner died after RBD (age 73+), annual RMDs are required in years 1-9.

4. NON-DESIGNATED BENEFICIARY: Estates, charities, non-qualifying trusts. 5-year rule or "ghost life expectancy" rule applies.

5. SUCCESSOR BENEFICIARY: Someone who inherits an already-inherited IRA. Always subject to the 10-year rule from the death of the first beneficiary.

Requirements

Must have inherited or expect to inherit an IRA or retirement account
Distribution rules depend on relationship to deceased (spouse, child, sibling, etc.)
Account must be properly titled as inherited IRA
Must understand whether deceased had started RMDs (Required Beginning Date)

How to Implement

1Determine your beneficiary category: spouse, eligible designated beneficiary, non-eligible designated beneficiary, or non-designated beneficiary
2Verify whether the deceased had reached their Required Beginning Date (age 73) and whether they took their final-year RMD
3Ensure the inherited IRA is properly titled: "[Deceased Name], IRA (Deceased [Date]) FBO [Your Name], Beneficiary"
4For spouses: options include rolling over to own IRA vs. keeping as inherited IRA, depending on age and needs
5For non-spouse (10-year rule): model your taxable income for each of the 10 years to optimize distribution timing
6Set calendar reminders for annual RMD deadlines and the 10-year emptying deadline
7Consider pairing with tax-loss harvesting, charitable giving, or Roth conversions (spouse only) to minimize tax impact

The bottom line
Inherited IRA outcomes hinge on your beneficiary type and the distribution timing you choose across the 10-year window. Modeling your taxable income each year is how beneficiaries avoid unnecessary tax.

Frequently Asked Questions

Spousal Rollover vs. Inherited IRA

Feature	Roll Over to Own IRA	Keep as Inherited IRA
10% early withdrawal penalty	Yes, if under 59½	No, at any age
RMDs start	When you turn 73	Year after death or when deceased would turn 73
New contributions	Yes	No
Name new beneficiaries	Yes	Yes
Roth conversion possible	Yes (after rollover)	No (must roll over first)
Can combine with existing IRA	Yes	No - must stay separate
Best for	Spouse 59½+, doesn't need money now	Spouse under 59½ who may need funds

Common Mistakes to Avoid

✗Titling the account incorrectly - must be: "[Deceased Name], IRA (Deceased [Date]) FBO [Your Name], Beneficiary"
✗Non-spouse trying to roll over to their own IRA - only spouses can do this. Attempting triggers full taxation.
✗Missing the deceased owner's final-year RMD if they died after their Required Beginning Date.
✗Forgetting the 10-year clock starts the year AFTER death (died 2023 = deadline Dec 31, 2033).
✗Assuming inherited Roth IRAs have no distribution requirements - the 10-year rule still applies.
✗Not splitting inherited IRAs among multiple beneficiaries by Dec 31 of year after death.
✗Spouse rolling over before 59½ without considering the 10% early withdrawal penalty.

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Educational Only: This information is for educational purposes. Consult a qualified financial advisor or tax professional before implementing.

Last reviewed: April 2026

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Sources

Internal Revenue Service, Rev. Proc. 2025-32
2026 inflation-adjusted amounts (tax brackets, standard deduction, estate & gift, FSA, credits)
Internal Revenue Service, Notice 2025-67
2026 retirement plan limits (401(k), IRA, SIMPLE, catch-up)
Internal Revenue Service, Rev. Proc. 2025-19
2026 HSA and HDHP inflation-adjusted limits

Educational information only. Not financial, tax, or legal advice or a recommendation. Figures are drawn from the primary sources cited above; verify current amounts with the source before acting.