By Andy Ives, CFP®, AIF®
IRA Analyst
QUESTION:
I inherited a traditional IRA from my mother in 2024. She passed before her required beginning date (RBD.) I know that I fall under the 10-year rule. The question is, do I need to start required minimum distributions (RMDs) in 2024 and deplete the account by 2034, or can I wait until 2034 and deplete the entire account all at once?
Thank you,
Holly
ANSWER:
Holly,
Since your mother passed away before her RBD, she never officially “turned RMDs on.” Since she did not start RMDs, then RMDs do not apply within the 10-year period. As such, you can leave the inherited IRA untouched and take a lump sum distribution by the end of 2034 if you wish. (However, it may behoove you to gradually draw down the inherited IRA over the full 10-year period to avoid a big tax hit in year 10.)
QUESTION:
Some of my IRAs are Roth and some are traditional. If my RMD is $1,500, can I withdraw the $1,500 from my Roth IRA, or must I take it from a traditional IRA?
ANSWER:
Your RMD must be withdrawn from the traditional IRA, because that will generate a taxable distribution. The IRS gives us the opportunity to maintain a tax-deferred IRA until it’s time for RMDs. At that point, the IRS wants their tax dollars. Consequently, a distribution from a Roth IRA cannot qualify as your traditional IRA RMD.