Updated Friday, October 24, 2014 as of 3:52 AM ET

Ask Ed Slott: Dealing With Inherited IRAs

I inherited an IRA from my elderly friend who passed away in 2011. It contained $300,000. The IRA is still in Valley National Bank. I have been taking the RMDs the past two years, once in 2011 and again in 2012. The IRA is still in her name, but shows that I am the beneficiary and that I am allowed to take the RMDs. My question is this: what options do I have with this IRA? Can I/should I roll it into a Roth IRA?  Should I do nothing, as it is earning over 3% interest, and continue to withdraw the RMDs? What do I do and what should I HAVE done?

Get access to this article and thousands more...

All On Wall Street articles are archived after 7 days. REGISTER NOW for unlimited access to all recently archived articles, as well as thousands of searchable stories. Registered Members also gain access to exclusive industry white paper downloads, web seminars, blog discussions, the iPad App, CE Exams, and conference discounts. Qualified members may also choose to receive our free monthly magazine and any of our daily or weekly e-newsletters covering the latest breaking news, opinions from industry leaders, developing trends and growth strategies.

Already Registered?

Comments (2)
You should immediately have the IRA titled into an inherited IRA. You can still get the 3% on the (CD?). PLEASE NOTE THAT IF THE FUNDS ARE IN A BANK OR CREDIT UNION AND NOT TITLED AS AN INHERITED IRA THE FUNDS LOSE FDIC OR NCUA INSURANCE 6 MONTHS AFTER DEATH. ALSO PLEASE BE AWARE THAT IRA FUNDS ARE ONLY INSURED FOR UP TO $250,000. YOU CAN TAKE SOME OF THE MONEY AND MOVE IT SOME PLACE ELSE IF YOU WANT. THEN 100% OF THE MONEY WILL BE INSURED IF YOU STAY IN THE BANK OR CREDIT UNION SIDE AND NOT IN THE INVESTMENT SIDE LIKE IN MUTUAL FUNDS ETC. YOU WILL BE ABLE TO TAKE THE RMD OUT OF THE LOWEST PAYING CD AT MOST PLACES BUT CHECK FIRST BEFORE MOVING IT.
Posted by Rose s | Friday, February 22 2013 at 9:50AM ET
Please don't move the money yourself. Do a institution to institution transfer ONLY or you will owe taxes on the amount that you take possession of. No 60 day option here like a rollover.
Posted by Rose s | Saturday, February 23 2013 at 9:00AM ET
Add Your Comments:
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.

Already a subscriber? Log in here