Inherited IRA Account

A beneficiary may take a withdrawal at any time by telephone or in writing, or they can establish automatic withdrawal to help meet the Required Minimum Distribution requirements by the IRS.

Generally, Required Minimum Distributions (RMDs) from an inherited IRA must be made by December 31 following the year of death of the original owner. However, depending on various circumstances, an RMD can be deferred if the beneficiary is a spouse. Or the payout must be completed by the end of the calendar year containing the fifth anniversary of the owner’s death (known as the 5-year rule).

Generally, this 5-year rule comes into play when the original owner did not name a beneficiary and they were not married at the date of death. In addition, it applies when the beneficiary is an entity, i.e., estate, charity or non-person.

Spouse Beneficiary

An inherited IRA may be an acceptable account type for a spouse that needs the flexibility of withdrawing assets prior to age 59½. Only a spouse beneficiary can treat an inherited IRA as their own for required distribution purposes.
Generally, Required Minimum Distributions (RMDs) must start the year following the year of death of the original owner. However, a spouse beneficiary may wait to take distributions until the original owner would have reached 70½.

Non-Spouse Beneficiary

If you were not planning on receiving an inheritance or don’t need the assets to maintain your living costs, then as a non-spouse, you may want to consider leaving the assets in an inherited IRA while taking required distributions based on an IRS-approved distribution method, which could last over your lifetime as assets grow tax-deferred.
Many financial institutions refer to these accounts as “Stretch IRAs” for beneficiaries.
For help calculating your RMD, please contact a Janus Henderson Retirement Specialist at 800.525.1093.