An IRA account that is transferred into a spouse or other beneficiaries' name after the death of the account holder is known as a Beneficiary IRA. It can also be called an Inherited IRA. This process means that the money stored in the original account is transferred to a new account in the beneficiary's name. The type of original account could have been a Traditional, Simple or Roth IRA. The transferred money stays tax free and is released at the request of the IRS.
The account holder must name the beneficiary which can be a spouse or another person, such as other family members. If there is no beneficiary named a Beneficiary IRA cannot be opened. If the beneficiary is the account holder's spouse, then the Beneficiary IRA can be opened in that person's name and they can treat the account as if it were their own.
Non-spouse beneficiaries cannot treat the account as their own and cannot rollover assets into their own accounts. Similarly non-spouse beneficiaries cannot keep the original account open. The new account can be a Traditional, Roth or Simple IRA as well. They can defer distributions until it is requested that they take a Required Minimum Distribution (known as RMD). Additional contributions cannot be made to a Beneficiary IRA.
Certain rules apply to the beneficiary IRA accounts. These have been made in relation to the age of the original account holder when they died, the type of the original account and the type of the new account.
New rules were introduced to help make the process of having a Beneficiary IRA easier. It used to be the case (before 2001) that the funds in the Inherited IRA had to be used up within a 5 year period. The new rules now allow funds to be distributed over a longer period of time, sometimes even decades. This is to the advantage of the beneficiary as the IRA can continue to be tax deferred.
The new rules also meant that the original account holder could pay smaller RMD's potentially leaving a larger amount in the account for the beneficiaries to inherit. It also meant that a spouse could either use the new account for themselves or add their own beneficiaries. This would result in the beneficiaries receiving that account one the spouse had died too.
Choosing the best retirement plan for you is crucial to ensure tat you are well catered for after you retire. The best retirement plan will have all the benefits you need to be able to survive after you stop working. It is not easy to live on just a basic pension so a boost is a bonus.
Beneficiary IRA or Inherited IRA accounts may seem daunting but a wealth of information to help you is available on the World Wide Web. If you prefer, you may talk to a financial expert to help you determine if a Beneficiary IRA is right for you. - 32535
The account holder must name the beneficiary which can be a spouse or another person, such as other family members. If there is no beneficiary named a Beneficiary IRA cannot be opened. If the beneficiary is the account holder's spouse, then the Beneficiary IRA can be opened in that person's name and they can treat the account as if it were their own.
Non-spouse beneficiaries cannot treat the account as their own and cannot rollover assets into their own accounts. Similarly non-spouse beneficiaries cannot keep the original account open. The new account can be a Traditional, Roth or Simple IRA as well. They can defer distributions until it is requested that they take a Required Minimum Distribution (known as RMD). Additional contributions cannot be made to a Beneficiary IRA.
Certain rules apply to the beneficiary IRA accounts. These have been made in relation to the age of the original account holder when they died, the type of the original account and the type of the new account.
New rules were introduced to help make the process of having a Beneficiary IRA easier. It used to be the case (before 2001) that the funds in the Inherited IRA had to be used up within a 5 year period. The new rules now allow funds to be distributed over a longer period of time, sometimes even decades. This is to the advantage of the beneficiary as the IRA can continue to be tax deferred.
The new rules also meant that the original account holder could pay smaller RMD's potentially leaving a larger amount in the account for the beneficiaries to inherit. It also meant that a spouse could either use the new account for themselves or add their own beneficiaries. This would result in the beneficiaries receiving that account one the spouse had died too.
Choosing the best retirement plan for you is crucial to ensure tat you are well catered for after you retire. The best retirement plan will have all the benefits you need to be able to survive after you stop working. It is not easy to live on just a basic pension so a boost is a bonus.
Beneficiary IRA or Inherited IRA accounts may seem daunting but a wealth of information to help you is available on the World Wide Web. If you prefer, you may talk to a financial expert to help you determine if a Beneficiary IRA is right for you. - 32535
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