I Inherited an IRA. Now What?

You’ve inherited an individual retirement account, or IRA. Now what?

Unfortunately, you cannot leave the money in the original IRA opened by the deceased person. There are several ways you can receive the funds after inheriting either a traditional or Roth IRA, but your options will be narrowed by a few factors. Failure to handle an inherited IRA properly can lead to a significant penalty from the IRS.

“Understand what type of beneficiary you are under the new SECURE Act, what options are available to you, and how they fit into your tax and investment profile,” says Mark Struthers, founder of Sona Wealth Advisors based in St. Louis Park, Minn. 

Here’s what you need to know about inheriting an IRA.

Get a Grasp on What You Have Inherited

The first step after being has been met for the year. Otherwise, you face a potentially significant penalty from the IRS.