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MRD Rules for Inherited IRAs

If you’ve inherited an IRA, learn about the minimum required distributions (MRDs) you may need to take soon, as well as how MRDs work in the long run.

Which rules governing MRDs apply to you depend on your relationship to the deceased original owner. The relationships fall into three categories:

  • Spouse inheritors
  • Non-spouse inheritors, such as son, daughter, brother, sister, or friend of the original owner
  • Entity inheritors, such as a trust, estate, or non-profit organization

Review the guidelines below “For All Inherited IRA Owners,” and then review the tab that applies to you specifically.

When to begin MRDs

MRD rules dictate not only how much, at a minimum, you are required to withdraw from an IRA, but when you must begin taking those distributions, as well. Generally, you must begin taking MRDs for Inherited IRA assets by December 31 of the year after the year of the original owner’s death.

Automate your withdrawals

One of the easiest ways to ensure you're meeting your MRD is to take advantage of your Fidelity IRA’s automatic withdrawal service. If you choose this option, based on the information you provide, Fidelity will:

  • Automatically calculate the MRD you need to withdraw from your Inherited IRA assets each year.
  • Direct those distributions to you, your bank account, or into a Fidelity nonretirement account that you specify.
  • Notify you annually each January of your MRD amount and schedule for the year.

Enroll online.

Enroll by mail using the Automatic Withdrawals - Inherited IRAs (PDF).

Penalty for missing MRDs

If you don't take the required minimum distributions from your account, you will be subject to a penalty equal to 50% of the amount that should have been withdrawn.

Inheriting a Roth IRA

If you inherit a Roth IRA and transfer the assets to an Inherited Roth IRA, unlike the original owner, you must take MRDs. As long as the assets have been in the Roth IRA for five or more years, these MRDs can be withdrawn federally tax-free.

The five-year rule

If the original account owner died prior to age 70½, you may choose to elect to use the five-year rule. Generally, this rule applies if the original owner died before April 1 of the year following the year the original owner would have turned age 70½. If you take advantage of this rule, you do not have to begin taking MRDs in the year following the year of the original owner’s death.

Under the five-year rule:

  • You can withdraw from your inherited IRA assets at any time, in any amount.
  • You must withdraw all assets by December 31 of the fifth anniversary year following the IRA owner's death.

As long as the account is depleted within this timeframe, the MRD penalties can generally be avoided.

Example:
Year of death: 2011
Fifth year after the year of death: 2016
Deadline for depleting the account: December 31, 2016

However, under the five-year rule, assets you withdraw will be included in your ordinary income and are taxable as such. This may impact your taxes significantly. Talk to a tax advisor if you plan to use this option.

Please note that the information provided by Fidelity Investments is general in nature and should not be considered investment, legal or tax advice. Fidelity does not provide investment, legal, or tax advice. Consult with a legal or tax professional regarding your unique tax situations.

Next steps

Open an Inherited IRA.
Or call an inheritance specialist at 800-544-0003 to take the first step for your Inherited IRA.

Enroll in Automatic Withdrawal Service.
If you have a Fidelity Inherited IRA, simplify MRDs by using the Automatic Withdrawal Service.

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

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    

Example of transferring to Inherited IRA; deceased spouse older than age 70½

In this example, the deceased spouse was age 72 at the time of death. The surviving spouse is age 65 in the year after death.

The surviving spouse decided to transfer the assets into an Inherited IRA and start taking MRDs in the year after the year of death based on his or her own age.

Year of death 2011
Age of spouse at time of death 72 years old
Year of first MRD (year following death) 2012
Age of beneficiary (surviving spouse) in 2012 65
Fair market value of Inherited IRA on 12/31/2011 $100,000
2012 life expectancy factor
(based on the IRS Single Life Expectancy Table)
21.0
2012 MRD amount $4,761.90 ($100,000 / 21.0)
2013 life expectancy factor
(revised annually for spouse beneficiaries based on the IRS Single Life Expectancy Table)
20.2
2013 MRD amount 12/31/2012 Fair Market (Value / 20.2)
Fair market value of Inherited IRA on 12/31/2012 $100,000

Example of transferring to Inherited IRA; deceased spouse younger than age 70½

In this example, the deceased spouse was age 52 at the time of death. The surviving spouse is age 70 in the year after death.

The surviving spouse decided to put the assets into an Inherited IRA, delaying MRDs until the deceased spouse would have turned 70½.

Year of death 2011
Age of spouse at time of death 52 years old (Date of birth 1/23/1959)
Year of first MRD (year deceased spouse would be 70½) 2029
Age of beneficiary (surviving spouse) in 2012 70
Age of beneficiary (surviving spouse) in 2029, the year the deceased spouse would have turned 70½ 87
2029 life expectancy factor
(based on the IRS Single Life Expectancy Table)
6.7
2029 MRD amount 12/31/2028 Fair Market (Value /6.7)
2030 life expectancy factor
(revised annually for spouse beneficiaries based on the IRS Single Life Expectancy Table)
6.3
2030 MRD amount 12/31/2029 Fair Market (Value / 6.3)

Example of a surviving child establishing an Inherited IRA by December 31 of the year following the parent's death

Year of death 2011
Year of first MRD (year following death) 2012
Age of beneficiary in 2012 46
Fair market value of Inherited IRA on 12/31/2011 $100,000
2012 life expectancy factor
(based on the IRS Single Life Expectancy Table)
37.9
2012 MRD amount $2,638.52 ($100,000 / 37.9)
2013 life expectancy factor
(revised annually based on the IRS Single Life Expectancy Table)
36.9 (37.9 – 1.0)
2013 MRD amount 12/31/2012 Fair Market (Value / 36.9)

Example of a surviving child not separating in a timely manner

In this example, the child does not establish and inherited IRA by December 31st of the year following parent's death.

Year of death 2011
Year of first MRD (year following death) 2012
Age of beneficiary #1 in 2012, child of original owner 46
Age of beneficiary #2 in 2012, child of original owner 50
Age of beneficiary #3 in 2012, sister of original owner 75
Fair market value of Inherited IRA on 12/31/2011 $100,000
2012 life expectancy factor would have been for
beneficiary #1
(based on the IRS Single Life Expectancy Table)
37.9
2012 life expectancy factor will be for all
beneficiaries using oldest beneficiary date of birth (based on the IRS Single Life Expectancy Table)
13.4
2012 MRD amount if could have used own LE $2,638.52 ($100,000 / 37.9)
2012 MRD amount using oldest beneficiaries LE $7462.68 ($100,000 / 13.4)
Additional MRD required for beneficiary #1 due to delay in separating accounts in a timely manner $4824.16

Example of a surviving child establishing an Inherited Roth IRA in a timely manner

Year of death 2011
Year of first MRD (year following death) 2012
Age of beneficiary in 2012 46
Fair market value of Inherited IRA on 12/31/2011 $100,000
2012 life expectancy factor
(based on the IRS Single Life Expectancy Table)
37.9
2012 MRD amount $2,638.52 ($100,000 / 37.9)
2013 life expectancy factor
(revised annually based on the IRS Single Life Expectancy Table)
36.9 (37.9 – 1.0)
2013 MRD amount 12/31/201 Fair Market (Value / 36.9)

Questions?

Speak with an inheritance specialist.

*Fidelity Portfolio Advisory Service® is a service of Strategic Advisers, Inc., a registered investment adviser and a Fidelity Investments company. These services provide discretionary money management for a fee.
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