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INHERITED ROTH IRAS AND ROTH CONVERSIONS: TODAY’S SLOTT REPORT MAILBAG

By Sarah Brenner, JD
Director of Retirement Education

Question:

Does the SECURE Act have any implication to Roth IRA account inheritance longevity? Please let me know.  Thank you.

Regards,

Vikram

Answer:

Hi Vikram,

The SECURE Act does affect inherited Roth IRAs in the same way it affects inherited traditional IRAs. Most beneficiaries who inherit a Roth IRA in 2020 or later will be subject to a 10-year payout period.

Question:

Hi Ed,

I just want you to know that I have all of your books which I refer to whenever I have a question about IRAs or retirement planning. However, there is one subject I could not find an answer to in any of your books.

My wife has a traditional IRA, but she does not have a Roth IRA. She has been retired for a number of years now, and would like to open a Roth IRA with a conversion from her traditional IRA. Can she do this?

Thank you,

Tony

Answer:

Hi Tony,

This is a question that seems to come up frequently. While there is a requirement that an individual (or their spouse) have earned income to make a tax year contribution to a traditional or Roth IRA, there is no such requirement to do a conversion. An individual with no earned income can convert an existing traditional IRA to a Roth IRA with no issues.

https://www.irahelp.com/slottreport/inherited-roth-iras-and-roth-conversions-todays-slott-report-mailbag

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Investment advisory services offered through Foundation Investment Advisors, LLC, a SEC-Investment Advisor Representative. Foundation Investment Advisors, LLC does not provide legal or tax advice. Investment Advisor Representatives of Foundation Investment Advisors, LLC may only conduct business with residents of the states and jurisdictions in which they are properly registered or exempt from registration requirements. Insurance and annuity products are sold separately through Chadmere Captial. Securities transactions for Foundation Investment Advisors, LLC clients are placed through TD Ameritrade.