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I have read all the IRS material on being the surving spouse who is the sole beneficiary of an IRA.
If I understand correctly, there are two choices..........either treat the IRA as an inherited IRA or roll the IRA into your own name/account.
What I am not clear on is the advantages/disadvantages of either choice.
It seems that if you are the younger spouse, its better to roll into our own name and thereby based on your longer life expectancy the RMDS will be smaller.
Can anyone explain the advantages/disadvantages to either choice?
Unlike most inherited assets, you have to pay taxes when withdrawing from IRA. Yes, I know, if the estate is huge enough (over $5 million) you have to pay estate taxes. But tax on an IRA applies even if the estate is $500.
If you are a spouce I would roll over to your own IRA. I think if you go the inherited IRA route RMD's have to start now. That should be the difference, but it has been a long time since I have looked at this.
Fidelity has an article that may help you understand your options. Also has some alternatives the IRS does not mention, which might, or might not, fit your situation.
It might also help to meet with an advisor from the current custodian of the IRA.
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