Permalink Submitted by Alan - IRA critic on Thu, 2019-04-18 16:16
No, apparently because only IRA OWNERS can convert TIRAs. The benefit of having an inherited rather than owned Roth is likely limited to spouse converting at a low marginal rate, then needing to tap the conversions before 5 years or 59.5. Is that the case here?
Permalink Submitted by Alan - IRA critic on Thu, 2019-04-18 19:23
The spouse might roll over the amount they do not expect to need before 59.5 to an owned Roth IRA, and keep the amount they expect to need until then in the inherited IRA to tap penalty free if needed. As the spouse approaches 59.5, they could roll convert more to the Roth. There is no limit to these conversions because the one rollover limit per 12 months does not apply to conversions. If it turns out the spouse needs to tap the Roth (and have no other Roth accounts) before 5 years or 59.5, they would owe the 10% penalty on the distributions unless they qualified for a penalty exception.
Permalink Submitted by Alan - IRA critic on Thu, 2019-04-18 16:16
No, apparently because only IRA OWNERS can convert TIRAs. The benefit of having an inherited rather than owned Roth is likely limited to spouse converting at a low marginal rate, then needing to tap the conversions before 5 years or 59.5. Is that the case here?
Permalink Submitted by Sten Lindquist on Thu, 2019-04-18 18:13
Yes- it is a younger spouse beneficiary who wants to access the money prior to 59.5
Permalink Submitted by Alan - IRA critic on Thu, 2019-04-18 19:23
The spouse might roll over the amount they do not expect to need before 59.5 to an owned Roth IRA, and keep the amount they expect to need until then in the inherited IRA to tap penalty free if needed. As the spouse approaches 59.5, they could roll convert more to the Roth. There is no limit to these conversions because the one rollover limit per 12 months does not apply to conversions. If it turns out the spouse needs to tap the Roth (and have no other Roth accounts) before 5 years or 59.5, they would owe the 10% penalty on the distributions unless they qualified for a penalty exception.