By Sarah Brenner, JD
Director of Retirement Education
Question:
Hello!
I have been a big fan for a long time. I have a question regarding a Roth IRA I inherited from my younger brother last year. I have heard that I must empty this account by the end of 2035. I have also heard that I can stretch distributions over my life expectancy. Which is correct?
Answer:
Thank you for the kind words! Both are actually correct. You are an eligible designated beneficiary (EDB) because you are older than your brother. Any beneficiary who is not more than ten years younger than the IRA owner is an EDB. Being older means you are not more than ten years younger. As an EDB who inherited a Roth IRA, you have a choice. You can choose the 10-year rule with no annual required minimum distributions (RMDs), or you can choose to use the stretch.
Question:
Can I make a Roth IRA contribution if I am contributing to a Roth 401(k) at my job?
Answer:
Yes, assuming your income does not exceed the Roth IRA contribution phaseout levels. Your ability to make a Roth IRA contribution is not affected by your participation in a Roth 401(k) at work. As long as you are otherwise eligible, you can go ahead and make a Roth IRA contribution.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/eligible-designated-beneficiaries-and-roth-ira-contributions-todays-slott-report-mailbag/