Q. As far as I understand, my successor to a traditional IRA can keep it for up to 10 years and will not be required to submit annual minimum allocations (RMDs). Is the rule the same for the inherited Roth IRA?
ANSWER: We’re glad you’re asking.
The rules are different for Roth IRAs.
“A user who is not a spouse inherited by the Roth IRA they have to take RMDs, ”said Michael Karu, a certified public accountant from Levine, Jacobs & Co. from Livingston. “As long as the assets in the Roth IRA are five or more years old, these RMDs can be withdrawn federally non-taxable. “
The user will not be subject to a 10% penalty for early withdrawal, he said.
“Assets can continue to grow without taxes, and the user can withdraw at any time,” he said. “However, user a inherited by the Roth IRA must liquidate the entire value by December 31 of the year it contains fifth anniversary death of the owner. “
As a warning, according to the five-year rule, no RMDs are needed during the five-year period, he said.
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Karin Price Mueller writes Bamboozled column for NJ Advance Media and is the founder NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find it NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com‘s weekly e-newsletter.