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Retirement Investing Guides

Direct Answer

This cluster covers the rules and mechanics of U.S. retirement accounts, focusing on required minimum distributions and inherited IRA beneficiary rules. Each guide covers a specific regulatory area, verified against current IRS guidance, without providing personalized advice.

What are required minimum distributions?

Required minimum distributions (RMDs) are annual withdrawals the IRS requires from most tax-deferred retirement accounts once the account owner reaches the applicable starting age. The amount is calculated each year by dividing the prior year-end account balance by a life expectancy factor from IRS Publication 590-B's Uniform Lifetime Table.

Traditional IRAs, SEP-IRAs, SIMPLE IRAs, and most employer-sponsored plans including 401(k), 403(b), and 457(b) plans are subject to RMDs. Roth IRAs are exempt during the account owner's lifetime. The SECURE 2.0 Act raised the starting age to 73 for those born between 1951 and 1959 and to 75 for those born in 1960 or later. Missing an RMD triggers an excise tax of 25% of the amount not distributed, reduced to 10% if corrected promptly.

How do inherited IRA rules differ from regular IRA rules?

Inherited IRAs follow a separate set of distribution rules that depend on the beneficiary category and the year the original account owner died. The SECURE Act of 2019 eliminated the stretch IRA for most non-spouse beneficiaries and introduced the 10-year rule, requiring the entire account to be distributed by December 31 of the tenth calendar year following the year of death.

Eligible designated beneficiaries, including surviving spouses, minor children of the decedent, disabled individuals, chronically ill individuals, and those not more than 10 years younger than the decedent, generally retain more distribution flexibility. Surviving spouses have unique options including treating the inherited account as their own IRA.

Guides in this cluster

Related reading

What guides are in this retirement cluster?

This cluster covers required minimum distributions and inherited IRA rules, including beneficiary categories, the 10-year rule, RMD calculations, Roth IRA owner rules, and current IRS guidance. Additional retirement topics including Roth conversion strategies and sequence-of-returns risk are covered in the main Retirement Investing hub and linked tools.

Swoopr Editorial Team

The Swoopr editorial team writes and reviews investment education content. All articles follow the editorial policy. Found an error? Use our corrections policy to report it.