Fixed Income

The Savings Game: Rules Regarding Inherited IRAs, and Other Reader Questions

BY Tribune News Service TIMESeptember 22, 2022 PRINT

By Elliot Raphaelson

Q: My dad passed away in April 2020. He left me his traditional IRA. He was 80 and was taking required minimum distributions. I understand from your columns and others that I am required to take required minimum distributions each year because of the SECURE Act. I was under the impression that, although I had to withdraw all of the assets by the end of the 10th year, I was under no obligation to make any withdrawals in years 1-9. I have made no withdrawals yet. What are my options? Naturally, I want to avoid any penalties.

A: I ran your question by IRA expert Ed Slott’s group to determine what your options were. They indicated that you should take a required minimum distribution (RMD) this year based on your IRA balance at the end of 2021 and your single life expectancy. They indicated that the IRS has not yet indicated what inheritors of IRAs should do in order to satisfy RMD requirements for 2021; they expect that the IRS will provide guidance by the end of this year regarding this issue.

Q: My mother was 80 when she passed in 2015, and I inherited her traditional IRA. I have been taking yearly RMDs based on my life expectancy every year since then. I am confused by the new regulations regarding inheritors of IRAs. Do I have to use the 10-year rule? What are the regulations for my children, who will eventually inherit this IRA?

A: You do not have to use the 10-year rule, which requires that all the assets in the IRA have to be taken out by the end of the 10th year starting with the year after the IRA owner died. You can continue using the single life expectancy table using the lifetime stretch option. You do have to use new tables that have been established.

The new regulations specified by the SECURE Act only apply to individuals who inherited retirement plans on or after January 1, 2021. However, your children, as successor inheritors (i.e., those who inherited IRAs from individuals who previously inherited IRAs) will be subject to the SECURE Act”s 10-year rule because they will inherit the IRA after January 1, 2021.

Q: I have been told that because of the new regulations associated with the SECURE Act, there are new advantages to naming a trust as the beneficiary of an IRA. Is that true?

A: No. In fact, there are more disadvantages associated with naming a trust as an IRA beneficiary because of the SECURE Act. That is because most trusts will be subject to the 10-year rule. Ed Slott discusses the disadvantages in his valuable book, “The New Retirement Savings Time Bomb” ( He writes: “ Most people don’t need to name trusts as their IRA beneficiaries. It’s costly (you’ll need an attorney and perhaps even a tax adviser who specializes in the area of IRA trusts and they don’t come cheap), it’s cumbersome and there is no tax benefit that can be gained with a trust that cannot be gained without one!” Slott is not referring to regular estate planning trusts used for passing non-retirement assets such as a house or bank account to beneficiaries.

Q: My husband passed away several years ago. I have not remarried. I am 59, and have been told that I am available for a survivor benefit at 60, but it would only be 71.5 percent of what I would receive if I waited until my full retirement age to apply. I am still working and can apply for a benefit based on my work record at 62. Will that impact my ability to file for a survivor benefit when I reach my full retirement age later?

A: No. Fortunately survivor benefits are independent from benefits based on your work record. When you reach your full retirement age, you will be eligible for 100 percent of your survivor benefit. However, you are not entitled to both benefits; you are eligible for whichever benefit is higher, the survivor benefit or the benefit based on your work record.

(Elliot Raphaelson welcomes your questions and comments at

©2022 Elliot Raphaelson. Distributed by Tribune Content Agency, LLC.

The Epoch Times Copyright © 2022 The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.

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