Financial Advisor Insights

What to do after inheriting a retirement account from a parent or relative

If you have just inherited a traditional IRA, SEP IRA, Roth IRA, 401(k) or 403(b) plan from a parent, sibling, or relative, you may be unsure about what your options are and what to do next. As a non-spouse beneficiary, you will need to begin taking distributions from the account. The timing of the distributions and what flexibility you may have will depend on the age of the deceased and whether you inherited the account alone or with other beneficiaries. For more information on what to do after receiving an inheritance, contact us today to schedule a consultation.

Under the Secure Act, beneficiaries who inherit a retirement account from a non-spouse (e.g. a parent or relative) after 2019 can no longer 'stretch' the distributions over their lifetime by taking required minimum distributions (RMDs) Instead, they will be forced to take the funds in 10 years. The change won't impact anyone who inherited a retirement account during 2019 or years prior.

What to do after inheriting an IRA or retirement account from a spouse, parent, or relative

Understanding your options after inheriting a retirement account from a parent, grandparent, sibling, or relative in 2019 (INFOGRAPHIC)

Options for an Inherited IRA

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