Inherited IRA—RMDs for nonspouse as beneficiary


The IRS generally requires owners of traditional IRAs, SEP-IRAs, and SIMPLE IRAs to begin taking required minimum distributions (RMDs) annually once the owners reach age 70½. In general, the first RMD must be taken by April 1 of the year following the year in which the IRA owner reaches 70½. This is known as the required beginning date (RBD).

IRA beneficiaries also are required to take minimum distributions from their inherited IRAs. Although the IRS does not require RMDs from a Roth IRA during the account owner's lifetime, the beneficiaries designated for that Roth IRA will be required to take distributions after his or her death. If you're inheriting any IRA and are considered a "designated beneficiary," you'll be required to take distributions over your own life expectancy (in most cases) or by the end of the year containing the fifth anniversary of the IRA owner's death.

RMD calculation considerations for inherited IRAs

You must take RMDs when you inherit an IRA. How you take them depends on whether the account owner died before, on, or after his or her required beginning date (RBD):

  • If the account owner died before the RBD, you may choose between two ways of calculating the RMDs—the life expectancy method or the five-year method.
  • If the account owner died on or after the RBD, you must use the life-expectancy method.

Life-expectancy method
The life-expectancy method requires that you withdraw certain minimum amounts annually according to calculations set forth by the IRS. You can always withdraw more than the required amount if you wish.

Five-year method
The five-year method requires that you receive all assets in the account no later than the end of the fifth year following the year of the account owner's death. There are no minimum withdrawal requirements. You may withdraw assets at any time, as long you redeem the entire account by the end of the fifth year following the owner's year of death. This option is only available if the IRA owner passed away before the RBD.

Calculating your RMD

Your RMD is calculated using a "life expectancy" factor taken from IRS life expectancy tables. Nonspouse beneficiaries use the Single Life Expectancy Table, found in IRS Publication 590. Each year, the prior year's ending balance is divided by the applicable factor. If you are one of a group of beneficiaries, your RMD may be calculated using the life expectancy factor of the oldest beneficiary of the group. However, you may be able to use your own life expectancy factor if certain conditions are met. Because this calculation can be complex, we suggest you read the Special rules and consult with a qualified tax professional or attorney to determine the best course of action for your particular situation.

Satisfying the final RMD

If the account owner's death occurred on or after his or her RBD, an RMD must also be withdrawn for the year of death. If the account owner did not withdraw the entire RMD prior to his or her death, then you and any other beneficiaries must withdraw any remaining RMD amount by the end of the year. If you're unsure whether the withdrawal has already occurred, contact Vanguard. (If the account owner had IRAs of the same type at other financial institutions, you may need to check their records as well because IRA owners are allowed to withdraw from one or more accounts of the same type to meet the amount of an RMD.)


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Related topics

Learn more about inherited IRAs
Special rules
Inherited spousal IRAs