Allows you to place the money inherited from an IRA (of a spouse or other person) into a Traditional IRA. The IRA allows the inherited assets to continue growing without immediate taxes. Only when you begin to withdraw money from your account will you pay taxes on your assets.
- If you are the beneficiary of a spouse or other person’s IRA, you can establish an Inherited IRA. Let’s say you inherit $5,000.
- The Inherited IRA acts as a Traditional or Roth IRA depending on how the account was originally established, so all $5,000 goes directly into the IRA – without tax – where it continues to grow.
- When distributions begin, you will pay taxes on the money each time you make a withdrawal.