You've Just Inherited an IRA: What Do You Do Now?

The rules on inherited defined contribution plans (not just IRAs) seem like a moving target, but here’s what you need to know (as the rules stand now).

A young woman looks at her laptop, looking a bit concerned or confused.
(Image credit: Getty Images)

In December 2019, the SECURE Act (version 1.0) flew through the House and Senate, attached to an appropriations bill. The measure, which stands for Setting Every Community Up for Retirement Enhancement, was the biggest piece of retirement legislation enacted since the Pension Protection Act of 2006. Convinced of this, I cleared my schedule to study the bill and the impact it would have on our retired clients.

Three months later, the world shut down. No one seemed to care about the SECURE Act. Unfortunately, the changes it initiated for retirement plan beneficiaries have produced a new group of adult children who, understandably, have no idea what they need to do with their inherited IRAs. While I’m going to use IRAs as the example throughout the article, the new rules apply to all defined contribution plans, including 401(k)s, 403(b)s, TSPs, etc.

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DOB/birth yearFirst RMD
6/30/49 or earlier70½

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Evan T. Beach, CFP®, AWMA®
President, Exit 59 Advisory

After graduating from the University of Delaware and Georgetown University, I pursued a career in financial planning. At age 26, I earned my CERTIFIED FINANCIAL PLANNER™ certification.  I also hold the IRS Enrolled Agent license, which allows for a unique approach to planning that can be beneficial to retirees and those selling their businesses, who are eager to minimize lifetime taxes and maximize income.