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Rules for Non-Spouse Beneficiaries
*Required Minimum Distribution (RMD): The amount the IRS requires individuals to withdraw each year from certain retirement accounts once they reach a specific age.
Who These Rules Apply To
A non-spouse beneficiary is anyone inheriting an IRA who is not the deceased owner’s spouse — such as adult children, grandchildren, siblings, relatives, or friends.
Each must open a new Inherited IRA and begin distributions based on the type of beneficiary and the age of the original owner at death.
The 10-Year Rule
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If the owner died before Required Minimum Distribution (RMD)* age: withdrawals may be taken anytime within 10 years.
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If the owner died after RMD age: annual RMDs are required in years 1–9, and the account must be fully depleted by the end of year 10.
Penalties for missed RMDs can reach 25% of the shortfall.
Exceptions — Eligible Designated Beneficiaries (EDBs):
Surviving spouses, minor children (until majority), chronically ill or disabled individuals, and those less than 10 years younger than the decedent may continue using a life expectancy (stretch) method.**
*Required Minimum Distribution (RMD): The amount the IRS requires individuals to withdraw each year from certain retirement accounts once they reach a specific age.
**Life Expectancy Stretch Method: A strategy that lets qualifying beneficiaries take required withdrawals over their lifetime instead of within 10 years.
RMD
LESM
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