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Inherited IRA: Learn About Your Choices

With an Inherited IRA you can continue the tax-advantaged potential growth of the assets and avoid the impact of immediate income taxes.

We realize that inheriting assets may be stressful. In addition to consulting your attorney or tax advisor, you can call a Fidelity inheritor services specialist at 800-544-0003 at any point to help guide you through the process.

Depending on your relationship to the original owner of the accounts, different options may be available to you. Please select the tab indicating your relationship to the deceased to learn about your options and to begin to move your inherited assets.

If you inherit an IRA or 401(k) directly from your spouse, you can choose:

  • Option 1: Roll over the inherited assets into your own new or existing Traditional IRA.

    When you inherit your spouse's IRA or workplace savings plan directly, you have one option available that no other IRA inheritor has: As a surviving spouse, you can transfer your inherited proceeds into your own new or existing IRA and treat these assets as if they were your own. For IRAs, the registration type of both IRAs must be the same (Traditional to Traditional or Roth to Roth).

    The benefit of this option is that both the amount and the timing of minimum required distributions (MRDs) are based on your own age.*

    Another benefit is that if you roll over these assets into your own IRA, your MRD will generally be based on the Uniform Lifetime Table (PDF), which assumes that distributions would extend over two lives, yours and a beneficiary 10 years younger than you. With this option, your MRD would be lower than if you transferred your assets to an Inherited IRA.

    Rolling over your assets to your own IRA may be advantageous if you are:

    • Younger than your spouse and your spouse died after age 70½, since this option would allow you to delay taking the MRDs until the year you turn age 70½.
    • Older than age 59½ or you do not need access to these assets until you reach age 59½, since you would not be subject to a 10% early withdrawal penalty.

    Required forms and paperwork

    To roll over inherited IRA assets into your existing IRA, you will need:

    To roll over inherited IRA assets into a new IRA, you will need:

    Note: Be sure to consult with your tax advisor to verify if an Inheritance Tax Waiver is required by the decedent's state of residence.

  • Option 2: Transfer your inherited assets to an Inherited IRA

    You have the option of transferring the IRA or 401(k) assets you inherit from your spouse to an Inherited IRA. With an Inherited IRA, the amount of your minimum required distributions (MRDs) will be based on your age and will be recalculated each year based on the factors in the IRS Single Life Expectancy Table.

    The timing of the initial distribution may be based on your spouse's age at the time of his/her death. If your spouse was:

    • Older than age 70½, you must begin taking MRDs by December 31 of the year following your spouse's death.
    • Younger than 70½, you may be able to delay MRDs until your spouse would have turned 70½.

    Transferring your assets to an Inherited IRA may be advantageous if you are:

    • Older than your spouse and your spouse died before age 70½, since this option would allow you to delay taking the MRDs until the year your spouse would have turned age 70½.
    • Younger than age 59½ and you need access to these assets immediately, since you would not be subject to a 10% early withdrawal penalty.

    Required forms and paperwork

    To transfer your inherited IRA assets into an Inherited IRA, you will need:

    Note: Be sure to consult with your tax advisor to verify if an Inheritance Tax Waiver is required by the decedent's state of residence.

  • Option 3: Roll over and convert inherited IRA assets to your own Roth IRA

    When you inherit your spouse's IRA or 401(k) directly, you have the option of converting it into a Roth IRA in your name. Roth IRAs have many benefits, including the potential for tax-free growth of assets and no MRDs during the lifetime of the original owner. However, you will need to pay taxes on the amount converted from the non-Roth IRA into the Roth IRA.

    Converting your inherited assets to a Roth IRA is more likely to be advantageous if you expect higher taxes in retirement and you can afford to pay the taxes with funds from other sources.

    Required forms and paperwork

    To roll over and convert inherited IRA assets into your existing Roth IRA, you will need:

    To roll over and convert inherited assets into a new Roth IRA, you will need:

    Note: Be sure to consult with your tax advisor to verify if an Inheritance Tax Waiver is required by the decedent's state of residence.

  • Option 4: Disclaim all or part of your inherited assets

    If, after consulting with your attorney and tax advisor, you find that you will not need or want all or some of your inherited IRA assets during your lifetime, you may want to disclaim—or refuse to inherit all or part—of these assets. Call a Fidelity inheritor services specialist at 800-544-0003 if this is the case.

    Your disclaimed inheritance would then be passed on directly to the next eligible beneficiaries. It is important to note that the beneficiaries must be named on the IRA, otherwise assets will pass according to the rules of succession as outlined in the applicable Fidelity IRA Custodial Agreement and Disclosure Statement (PDF). Any minimum required distributions would be based on the other beneficiaries’ ages, rather than your own.

    If the other beneficiaries are younger than you, you would, in effect, be stretching out the potential for tax-deferred growth on this IRA legacy. For example, if your spouse named you as the primary beneficiary of his IRA, and your son as the contingent beneficiary, if you disclaim your IRA inheritance (meeting all the necessary requirements), your son would inherit all of the IRA assets. Since the minimum required distributions would now be based on his life expectancy, the MRD amount would be lower, leaving more assets in the account to potentially compound tax-deferred.

    Disclaiming all or part of your IRA inheritance may be advantageous in the following situations:

    • You don’t need all or some of these assets and you’d like a younger beneficiary to be able to maximize the potential for tax-deferred growth by stretching distributions out over his/her lifetime.
    • The decedent’s estate was not structured ideally for estate tax purposes. A disclaimer may be used to allow assets that would otherwise be passed to the surviving spouse to go to other beneficiaries. While assets left to a spouse are generally not subject to estate taxes, they will be part of your estate upon your passing. If you can afford it and it aligns with your goals, you may want to consider disclaiming an amount up to the estate tax exemption limit in order to take advantage of your estate tax exemption.

    Note: If you want to take advantage of this option, you must disclaim assets within nine months of the IRA owner's deathbefore you've actually taken possession of those assets. A disclaimer is an irrevocable decision to give up your right to inherit the IRA assets. Be sure to consult with a tax or legal advisor about this option and to verify if an Inheritance Tax Waiver is required by the decedent's state of residence.

IRS Single Life Expectancy Table
Age Life
expectancy
factor
Age Life
expectancy
factor
Age Life
expectancy
factor
0 82.4 38 45.6 76 12.7
1 81.6 39 44.6 77 12.1
2 80.6 40 43.6 78 11.4
3 79.7 41 42.7 79 10.8
4 78.7 42 41.7 80 10.2
5 77.7 43 40.7 81 9.7
6 76.7 44 39.8 82 9.1
7 75.8 45 38.8 83 8.6
8 74.8 46 37.9 84 8.1
9 73.8 47 37.0 85 7.6
10 72.8 48 36.0 86 7.1
11 71.8 49 35.1 87 6.7
12 70.8 50 34.2 88 6.3
13 69.9 51 33.3 89 5.9
14 68.9 52 32.3 90 5.5
15 67.9 53 31.4 91 5.2
16 66.9 54 30.5 92 4.9
17 66.0 55 29.6 93 4.6
18 65.0 56 28.7 94 4.3
19 64.0 57 27.9 95 4.1
20 63.0 58 27.0 96 3.8
21 62.1 59 26.1 97 3.6
22 61.1 60 25.2 98 3.4
23 60.1 61 24.4 99 3.1
24 59.1 62 23.5 100 2.9
25 58.2 63 22.7 101 2.7
26 57.2 64 21.8 102 2.5
27 56.2 65 21.0 103 2.3
28 55.3 66 20.2 104 2.1
29 54.3 67 19.4 105 1.9
30 53.3 68 18.6 106 1.7
31 52.4 69 17.8 107 1.5
32 51.4 70 17.0 108 1.4
33 50.4 71 16.3 109 1.2
34 49.4 72 15.5 110 1.1
35 48.5 73 14.8 111+ 1.0
36 47.5 74 14.1    
37 46.5 75 13.4    

Open an account

Choose a Traditional or Roth IRA, according to the type of IRA you have inherited:

Open an Inherited IRA

Open an Inherited Roth IRA

Questions?

Call an Inheritor Services specialist.

The tax information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal, estate planning, or tax advice. Fidelity does not provide tax advice. Always consult with an attorney or tax professional regarding your specific legal or tax situation.
*After you reach age 70½, the IRS generally requires you to withdraw an MRD annually from your tax-advantaged retirement accounts (excluding Roth IRAs).
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