I have two inherited Roth accounts that total around $80,000, and an inherited IRA account with around $80,000 from my partner’s 401(k) account. My partner sadly passed away this year at age 45. I am 70 years old. What are my RMD requirements for this year and the next few years?

– Jose

First of all, I am sorry for your loss. Hopefully I can answer your questions as completely as possible to help ease your mind. And your questions are entirely valid, as understanding the rules around required minimum distributions (RMDs) can be confusing on their own, and even more so when accounts are inherited.

If you need help finding professional financial advice, match with a fiduciary financial advisor today.

While I unfortunately will not be able to share exact amounts of your upcoming and future RMDs, I will try to provide some examples that can help you calculate them on your own, or with the help of either a certified public accountant or financial advisor.

What Are the RMD Rules for Inherited Accounts?

The RMD rules for inherited IRAs differ based on the type of account and the relationship between the beneficiary and the original account holder. For married couples, the rules often provide more flexibility, while non-married partners face stricter requirements.

Traditional IRAs

For traditional IRAs, spouses can choose to treat the account as their own or as an inherited IRA. Treating the account as their own means the surviving spouse transfers the account into their name or rolls it into their own IRA. In either case, RMDs will begin on the surviving spouse’s timeline and be calculated using the IRS’ Uniform Lifetime Table, which determines distributions based on the beneficiary’s life expectancy.

If you inherit the account as a spouse and choose to treat the account as your own, then you will not be subject to RMDs until you turn 73 in a few years. When the time comes to begin taking RMDs, you would look up your age on the Uniform Lifetime Table and divide the account balance by the relevant life expectancy factor (currently, the 73-year-old factor is 26.5). If the inherited account’s balance is $80,000, then your RMD for the first year – assuming life expectancy factors do not change – would be approximately $3,019 ($80,000 ÷ 26.5). This approach allows the surviving spouse to delay RMDs until they reach the applicable age.

Although it doesn’t apply to your circumstances, if your surviving spouse was already subject to RMDs from their own accounts, then the inherited IRA would follow the same RMD schedule as their existing accounts.

Alternatively, if the account is maintained as an inherited IRA, RMDs must begin by December 31 of the year after the original account holder’s death (2025 in this case) regardless of the surviving spouse’s age and are calculated using the Single Life Expectancy Table. Right now, the 70-year-old life expectancy factor is 17.2. Using the same $80,000 balance, your RMD for the first year would be approximately $4,651 ($80,000 ÷ 17.2). This option generally results in larger annual distributions compared to treating the account as their own.

Non-married partners inheriting a traditional IRA are subject to the SECURE Act’s 10-year rule. This rule requires the entire account balance to be distributed within 10 years of the original account holder’s death. If the account holder had not started RMDs – as is the case here – then the non-married beneficiary is not required to take annual distributions but must withdraw the full balance by the end of the 10th year.

For example, with an $80,000 inherited account, you might choose to withdraw equal amounts of $8,000 per year for 10 years or plan for larger distributions in specific years based on your tax situation and income needs.

(Whether you inherit an IRA from your spouse or someone else, consider matching with a financial advisor who can help integrate the inheritance into a holistic financial plan.)

Roth IRAs

Roth IRAs also follow distinct rules depending on marital status. A person who inherits a Roth IRA from their spouse has the option to treat the account as their own, which eliminates RMD requirements during their lifetime. This approach allows for continued tax-free growth of the assets.

If the Roth IRA is kept as an inherited account, then the first RMD must be taken by December 31 of the year after the original owner’s death based on the Single Life Expectancy Table. The same example used previously applies – a 70-year-old inheriting an $80,000 Roth IRA would calculate their RMD using a life expectancy factor of 17.2, resulting in a tax-free distribution of approximately $4,651 in the first year.

For non-married partners, the 10-year rule applies to Roth IRAs as well. Since Roth distributions are tax-free, the primary consideration is timing withdrawals to align with financial goals, not tax optimization. A non-married beneficiary might decide to withdraw $8,000 annually for 10 years or allow the assets to grow tax-free for nine years and withdraw the full balance in the 10th year. Again, it all depends on your income needs.

(And if you need additional help figuring the best strategy for withdrawing money from an inherited account, speak with a financial advisor.)

What to Consider When Inheriting IRAs

As alluded to, you should weigh several factors when inheriting traditional IRAs, 401(k)s and Roth IRAs. First and most obviously, marital status plays a significant role in flexibility.

Second, traditional IRAs inherited by spouses present a choice between treating it as your own or keeping it as an inherited account. Treating the account as your own allows RMDs to follow the Uniform Lifetime Table, providing a more gradual distribution schedule and potentially reducing the annual tax impact. Alternatively, keeping it as an inherited IRA requires using the Single Life Expectancy Table, which often results in higher RMD amounts each year. The key tradeoff in the decision is distribution amount and taxes.

For the Roth IRAs inherited by spouses, treating them as your own would eliminate RMDs entirely. This is typically the most advantageous option for preserving the tax-free growth of the assets. However, if the accounts are kept as inherited Roth IRAs, RMDs must be taken based on the Single Life Expectancy Table, even though these distributions are tax-free.

The tax implications of each choice are a major consideration. Traditional IRA distributions are taxed as ordinary income, and managing the timing of these withdrawals is essential for minimizing the tax burden. While Roth IRA distributions are tax-free, required withdrawals could influence your overall strategy by altering the timing and magnitude of any other income streams you maintain.

(Tax planning can be complicated, which is why it can help to have a fiduciary financial advisor guide you through tax-related questions.)

Integrating the Accounts Into Your Financial Plan

Given the complexities of RMD rules, beneficiaries like yourself should take a strategic approach to manage inherited accounts.

First, evaluate the options for each type of account. For the traditional IRA, decide whether to treat it as your own or keep it as an inherited account based on your current and future income needs, tax situation and financial goals. For the Roth IRAs, treating them as your own if you and your partner were married is generally recommended to avoid RMDs and simplify account management.

Second, plan for RMDs by understanding the applicable deadlines and calculations. For example, inherited IRAs require the first RMD to be taken by December 31st of the year following the original account holder’s death, while the 10-year rule for non-spousal beneficiaries allows flexibility within a decade but demands a full withdrawal by the end of that period. Staying informed about these timelines is crucial to avoid penalties.

Next, integrate the inherited accounts into your broader financial plan. Consider how RMDs will affect your taxable income and explore ways to offset this impact through tax-advantaged strategies such as charitable contributions or Roth conversions. Of course, understand how distributions from these accounts fit into your other income streams, such as your salary, pension, 401(k) and Social Security.

Finally, seek professional guidance to navigate these rules effectively. A CPA can help ensure compliance with IRS regulations, while a financial advisor can help integrate these accounts into your financial plan. (And if you need help finding a finance professional, this free tool can connect you with three fiduciary advisors who serve your area.)

Bottom Line

RMD rules for inherited accounts can be complex. I did not even cover the possibility that you could be inheriting inherited IRAs! That is a subject for another conversation. Given the complexity at play, understanding RMD rules is key to making informed decisions that preserve the value of your inheritance. Whether you are a spouse or non-married beneficiary, careful planning and strategic withdrawals can help you maximize the benefits of inherited assets while minimizing tax liabilities. By understanding your current situation, evaluating your options, planning for RMDs and integrating these accounts into your overall financial plan, you can turn this inheritance into a lasting financial asset.

Tips for Managing RMDs

Whether you have your own pre-tax retirement account or inherited one from someone else, consider working with a financial advisor if you need help navigating and planning for RMDs. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you’re looking to avoid RMDs altogether, consider executing a series of partial Roth conversions. By converting a portion of your tax-deferred savings each year, you can reduce or potentially eliminate RMDs, since Roth accounts aren’t subject to these mandatory withdrawals. However, you will owe income tax on each conversions.
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Jeremy Suschak, CFP®, is a SmartAsset financial planning columnist who answers reader questions on personal finance topics. Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column.

Jeremy is a financial advisor and head of business development at DBR & CO. He has been compensated for this article. Additional resources from the author can be found at dbroot.com.

Please note that Jeremy is not a participant in SmartAdvisor AMP, is not an employee of SmartAsset and he has been compensated for this article.

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