EDBs Have a Choice: Stretch vs. 10-Year
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EDBs Have a Choice: Stretch vs. 10-Year

By Andy Ives, CFP®, AIF®
IRA Analyst

By Andy Ives, CFP®, AIF®

By now, most are aware the SECURE Act created a new class of beneficiaries called "eligible designated beneficiaries" (EDBs). This group includes surviving spouses, minor children of the account owner (until age 21), disabled individuals, chronically ill individuals, and people who are not more than 10 years younger than the IRA owner. (Those older than the IRA owner also qualify.)

EDBs have a distinct advantage over non-EDBs: they are allowed to stretch required minimum distributions (RMDs) from an inherited IRA. While non-EDBs are saddled with the newly created 10-year rule (which dictates the entire inherited IRA must be depleted by the end of the tenth year after the year of death), EDBs can blissfully continue to elongate the distribution period over their own single life expectancy. In many cases this can be decades. For years and years an EDB can minimize taxes by only taking the RMD. For years and years an EDB can leave the bulk of inherited Roth IRA dollars in the account, allowing them to grow tax free.


Q: I continue to hear conflicting information regarding non-spouse inherited IRA's. My client (age 55) inherited an IRA from her brother (age 70) who died in September 2021 – before his RBD. She established an IRA BDA account. Since she in a non-spouse and not an EDB, she has to withdraw the entire account within 10 years. My understanding is that she is not required to make annual withdrawals but can withdraw as she wants as long as the account is exhausted within the 10 -year period. Is this correct? I'm reading much about the IRS eliminating the penalties for not withdrawing in 2022 but thought that was if the decedent dies on or after his RBD.

Can you please help us clarify this?


Q: Is there a limit on the number of IRA rollovers you can do in a given year? Are the rules different for trustee-to-trustee transfers?


Q: I just inherited my spouse's inherited IRA (he got it from his father). He (my husband) was already taking required minimum distributions (RMDs) based on his own single life expectancy. My question is, do I have to empty that account in 10 years based on the SECURE Act? (I think this is correct, but if I don't have to do it, I don't want to!)


Q: I am interested in your interpretation of the RMD (required minimum distribution) rules using the following facts:

  • Original IRA owner's DOB is 1/21/29
  • Original IRA owner's date of death is 12/29/21
  • IRA's nonspouse beneficiary's DOB is 7/21/54
  • No RMD was taken in 2022 by the non-spouse beneficiary

Does the beneficiary have both a 2022 and a 2023 RMD that can be taken in 2023?


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