How Do You Manage An Inherited IRA?
Your choices of how to manage an inherited IRA (individual retirement account) depend on whether the owner died before April 1 of the year following when he would have turned 71 1/2, when the owner would be required to start taking a minimum amount regularly from the account. This date is the “required beginning date.” Be aware when you manage an inherited IRA that if the account holder died before the required beginning date, the balance on the account will be sent to his estate according to the 5-year rule which means the full amount of the IRA must be distributed no later than December 31 of the fifth year after the account owner’s demise. Think about how you choose to receive and manage your money because this will affect you when you manage an inherited IRA. If you wait until the end of 5 years to receive your money, it maximizes your tax deferral. Choose to receive the money distributed over the 5-year period to help you avoid a “bunching income.” Know that if the IRA owner died
