Originally published April 2015. Last updated March 2026.
IRAs seem simple until you start dealing with beneficiaries, required distributions, and inheritance rules. Here are three questions that come up constantly.
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1. What Happens to My IRA When I Die?
It depends on who your beneficiary is.
Spouse: Your surviving spouse has the most flexibility. They can roll your IRA into their own, treat it as inherited, or take a lump sum. Rolling it into their own IRA is usually the best option because RMDs are based on their age, and they can name their own beneficiaries.
Non-spouse (adult child, sibling, etc.): Under the SECURE Act (2020), most non-spouse beneficiaries must withdraw the entire inherited IRA within 10 years. There are no annual RMD requirements, but the full balance must be distributed by the end of year 10. This can create a significant tax hit if not planned carefully.
Eligible designated beneficiaries (minor children, disabled/chronically ill individuals, beneficiaries not more than 10 years younger than the deceased) can still stretch distributions over their life expectancy.
2. When Do RMDs Start?
Required minimum distributions from traditional IRAs begin at age 73 (or 75 if you were born in 1960 or later). Your first RMD must be taken by April 1 of the year after you reach the applicable age.
A word of caution: if you delay your first RMD to April 1, you’ll have to take two RMDs in the same year (the delayed first one plus the current year’s). That can push you into a higher tax bracket and trigger Medicare surcharges (IRMAA).
Roth IRAs have no RMDs during the owner’s lifetime. This is one of the biggest advantages of Roth accounts and a major reason Roth conversions can make sense before RMD age.
3. Can I Still Contribute to an IRA After Retirement?
Yes, if you have earned income (wages, self-employment income, or a working spouse). There’s no age limit on IRA contributions. The 2025 limits:
- Under 50: $7,000
- 50 and older: $8,000
For Roth IRAs, your modified adjusted gross income must be under $150,000 (single) or $236,000 (married filing jointly) for a full contribution. Above those limits, the contribution phases out. If you’re over the limit, a backdoor Roth conversion is still available.
For traditional IRAs, anyone with earned income can contribute regardless of income. But the tax deduction phases out if you (or your spouse) have a workplace retirement plan and your income exceeds certain thresholds.
FAQ
What’s the penalty for missing an RMD?
25% of the amount you should have withdrawn. If you correct the mistake within two years, the penalty drops to 10%. This was reduced from 50% under SECURE 2.0.
Should I convert my traditional IRA to a Roth?
It depends on your current vs. future tax rate. If you’re in a low bracket now (early retirement, before Social Security and RMDs), converting makes sense. You pay tax at today’s lower rate and get tax-free growth and withdrawals later. Run the numbers with your advisor.
Can my spouse inherit my Roth IRA tax-free?
Yes. If the account has been open at least five years, your spouse can roll it into their own Roth IRA and withdraw everything tax-free. No RMDs, no taxes. It’s one of the best wealth transfer tools available.
Schedule a free 20-minute consultation to review your IRA strategy.
R.L. Brown Wealth Management
106 W Vine St, Suite 300, Lexington, KY 40507
859.317.5889
