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Your options depend first on who you are in relation to the original owner—not simply on whether the account is traditional or Roth. Identify your beneficiary category, the owner’s date of death and required minimum distribution (RMD) status, then compare the applicable payout deadline with your cash needs and tax situation. A spouse may generally treat a traditional IRA as their own or keep it as an inherited account; many other individual beneficiaries must empty the account by the end of the tenth year after the owner’s death. The details can change the schedule, so confirm the rules with the custodian before taking action.
What are my options as a beneficiary of an inherited IRA?
Start by establishing which category applies to you. Federal distribution rules distinguish surviving spouses, eligible designated beneficiaries, other designated individual beneficiaries, and beneficiaries such as estates or trusts. The owner’s date of death and whether they had reached the required beginning date for RMDs can also affect the payout schedule. The IRS explains these categories and rules in Publication 590-B (2025) and its RMD FAQs.
| Beneficiary or account situation | General federal-rule direction | What to confirm |
|---|---|---|
| Surviving spouse of a traditional IRA owner | May generally treat the account as their own or retain beneficiary treatment. The RMD schedule can differ between those choices. | Whether you are the sole designated beneficiary; both spouses’ ages; the owner’s RMD status; the account terms; and the tax consequences of each option. |
| Eligible designated beneficiary who is not the spouse | May generally qualify for life-expectancy-based payments. Some may choose a 10-year payout route, and certain events can trigger a later 10-year payout period. | Your exact eligible category, the owner’s RMD status, any election deadline, and whether annual RMDs apply. |
| Other individual designated beneficiary | Generally must distribute the full inherited IRA by the end of the tenth year after the owner’s death. Annual RMDs may also be required within that period. | The owner’s RMD status, the final distribution year, and the applicable annual withdrawal schedule. |
| Estate, trust, or another nonindividual beneficiary | Different rules can apply, including a five-year rule in some cases and special rules for trusts. | The beneficiary designation, trust language, any look-through treatment, and the custodian’s requirements. |
| Beneficiary of a Roth IRA | Post-death distribution rules still apply. The deadline may be five or ten years, unless an eligible designated beneficiary exception applies; qualified distributions may be tax-free. | The owner’s Roth five-year history, your beneficiary category, the deadline, and whether distributions qualify for tax-free treatment. |
These are general federal directions, not a complete determination of an individual account’s rules. Older inheritances, multiple beneficiaries, trusts, and plan-specific terms can change the analysis.
Can I roll an inherited IRA into my own IRA?
If you are the surviving spouse
A surviving spouse who is the sole designated beneficiary may generally elect to treat the traditional IRA as their own, including through an eligible rollover or by designating themselves as owner. Alternatively, the spouse can retain beneficiary status. Owner treatment can change when RMDs begin or how they are calculated, so compare both options using your age, the original owner’s RMD status, cash needs, and tax projections before changing the account registration.
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If you are not the spouse
Do not assume you can roll an inherited IRA into your own IRA. A nonspouse beneficiary generally remains subject to beneficiary distribution rules rather than taking ownership as if the assets were their own. Ask the custodian how it handles the inherited account and any permitted beneficiary transfer before moving money.
Should I take a lump sum or leave the inherited IRA invested?
A lump-sum withdrawal can provide immediate access, but it may bring taxable income forward for a traditional IRA. Keeping assets in an inherited account can preserve the opportunity to withdraw over the applicable period, but it does not remove distribution deadlines or any annual RMD requirement. The right comparison is between the amount and timing of withdrawals you need, your other income, and the account’s required payout schedule—not simply “cash now” versus “invested.”
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- Consider immediate cash needs: Money needed soon may justify a withdrawal, while funds not needed immediately may have more flexibility within the permitted schedule.
- Map the required schedule first: Establish the final deadline and whether annual withdrawals are required before deciding how much to take voluntarily.
- Project the tax impact: Compare withdrawal timing with other expected income and discuss withholding or estimated tax with a tax professional if the amount is material.
- Check account terms: Ask the custodian about its inherited-account process, investment options, and any account-specific requirements.
Do I have to withdraw inherited IRA money every year?
Not always. The 10-year rule is a final full-distribution deadline, not a universal annual-withdrawal schedule. Under the IRS’s general rule, many beneficiaries who are not taking life-expectancy payments must empty the IRA by December 31 of the year containing the tenth anniversary of the owner’s death. For example, for an owner who died in 2024, that deadline is December 31, 2034.
Some beneficiaries must also take annual RMDs during the period. The applicable schedule depends on beneficiary category and the owner’s RMD status. For a beneficiary subject to the 10-year rule when the owner died before their required beginning date, Publication 590-B says no distribution is required before year ten. That rule should not be assumed to apply to every beneficiary. Check the current schedule with the custodian and consult the IRS’s Publication 590-B (2025).
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Check the year-of-death RMD
If the owner died on or after their required beginning date, make sure any RMD due for the year of death was completed. If the owner had not taken the full amount, the beneficiary must ensure the remaining RMD is distributed. The IRS describes RMD rules and potential shortfall consequences on its required minimum distributions topic page.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Will I owe taxes when I withdraw from an inherited IRA?
Traditional inherited IRA
Traditional IRA distributions are generally taxable in the year received. If the original owner made nondeductible contributions, part of a distribution may be nontaxable because of the account’s basis. Ask for records of any basis and discuss how it affects your tax reporting before assuming the entire withdrawal is taxable.
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Inherited Roth IRA
Beneficiaries remain subject to post-death distribution rules even when the inherited account is a Roth IRA. Whether a distribution is qualified affects its tax treatment; qualified Roth IRA distributions are not included in gross income. The owner’s Roth five-year history is relevant, so ask the custodian for the account history and confirm how the distribution rules apply to your circumstances in IRS Publication 590-B (2025).
If an RMD is missed
An RMD shortfall may be subject to an excise tax of 25% of the amount not distributed, reduced to 10% if corrected within two years. The IRS’s RMD guidance describes these rates; check the current instructions for the circumstances and correction process that apply to you.
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What should I ask the IRA custodian?
Gather the documents and answers that determine your options before requesting a distribution or changing account ownership:
- Request the date-of-death account valuation, beneficiary paperwork, account type, and a copy of the IRA agreement.
- Ask how the custodian classifies you as a beneficiary and what final distribution date it has on file.
- Ask whether an RMD was due for the year of death and whether the owner completed it.
- Confirm whether annual RMDs apply before the final deadline, and ask for the amount and due date of any required distribution.
- If you are a spouse, request the custodian’s process for comparing owner treatment with beneficiary treatment. Do not retitle or roll over assets until the custodian confirms the procedure and you have reviewed the tax consequences.
- If the account is Roth, request the original owner’s Roth five-year history.
- Keep withdrawal and tax-reporting records, and discuss basis, withholding, and estimated tax with a qualified tax professional when appropriate.
Trusts, estates, multiple beneficiaries, older inheritances, and state tax rules can require additional analysis. The governing account documents and facts specific to your situation matter alongside federal rules.
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