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Before the SECURE Act was passed in 2019, it was generally allowed for people to withdraw their inherited Roth IRA money over their lifetime, with the money growing tax-free. However, now, this rule has changed.

The SECURE Act now states that the beneficiaries of an inherited IRA have to empty the account within ten years following the owner’s death.

Despite the new law, there are still ways to benefit from an inherited IRA. Here are some strategies that you can use to maximize the benefits of your inheritance.

Switch to an inherited Roth IRA account

Before you start planning on your wealth, it’s important that you first get the necessary administrative steps done. One of these is transferring the money from an inherited IRA to a new one. If you have a Roth IRA, you can make the transfer directly into it.

If not, then you’ll have to open a new Roth IRA and make the transfer. If you’re transferring the money from an individual who isn’t your spouse, then you need to establish a new Roth IRA to take advantage of this feature.

Traditional IRAs and Roth IRAs are two different types of accounts. If you inherited a traditional IRA, then you’re going to have to pay taxes on the money you withdraw. On the other hand, if you have a Roth account, then you can enjoy tax-free withdrawals. Before transferring the money from one type of IRA to another, make sure that the new one is the same kind of account that you want to use.

Be sure to check if you qualify for an exemption

There are still some exceptions to the new rule regarding the distribution timeline of an inherited IRA. For instance, you may be able to take advantage of a different distribution schedule if your income is lower than that of your spouse.

If you’re a minor child, the distribution schedule of an inherited IRA will be determined based on your life expectancy instead of a time limit. This means that even if you’ve been a beneficiary of an IRA for a couple of months or years before you turn 18, your ten-year requirement won’t apply.

If you were a beneficiary of an IRA from a spouse, then you can treat the account as if it were your own. This means that if you’re suddenly widowed, and the money was left to the surviving spouse, you can treat it as if it were your own. You don’t have to take distributions until you reach age 72.

If you’re suffering from a serious illness or disability, then you can take advantage of this feature and allow your distributions to last for a longer period of time.

An exemption is usually provided for unmarried couples or siblings who inherited an IRA from one another. But, regardless of the source of the money, you can benefit from this feature and distribute the money over your lifetime if you were close to the account’s owner at the time of the transfer.’

Take advantage of the opportunity to focus on money goals

If you’re still planning on investing for your retirement, then the money that you’re receiving from the inheritance could be an excellent opportunity to boost your savings. It can also help you tackle other financial goals, such as paying down debts and establishing an emergency fund.