My father recently died and all his monetary accounts were POD to me and my brother. The lady at the investment service was very helpful, but I still don’t understand the 10 year rule. She said I was required by the IRS to take it all out of his IRA in 10 years. I can’t leave it like I want to. Not asking for financial advice (I know the sub for that), just an explanation of how this rule works. Thanks.
In: Economics
IRA are accounts specifically for saving for retirement where, depending on the type, either the gains aren’t taxed or the initial deposits aren’t taxed. There is a limit to how much can be contributed to these a year, and any individual can only open a single IRA, because the government doesn’t want to allow people to avoid these taxes on all their income. Allowing IRAs to be inherited without restriction would effectively allow bypassing this limit, so there is a stipulation that you cannot just hold on to the IRA indefinitely.
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