Inherited IRA as a Spouse: 4 Key Strategies to Know
March 26, 2026
If you are the spouse of an IRA owner and the named beneficiary, you should know the rules. Both you and the owner should understand inherited IRA rules. Misunderstanding these rules can lead to unnecessary taxes, potential penalties, or the loss of valuable tax-advantaged growth opportunities.
The IRS requires IRA owners to take required minimum distributions (RMDs) once they reach a certain age. In most cases, that age is 73. These distribution rules can also apply when an IRA is inherited.
For surviving spouses, there are generally four primary options for handling inherited IRA assets.
1. Roll the assets into your own IRA
A surviving spouse has a unique advantage. Other beneficiaries do not have it. The spouse can move inherited IRA assets into an IRA in their own name. They can treat the funds as their own retirement savings.
This approach may make sense if you do not need the funds right away. It also lets your money keep growing in a tax-advantaged account for as long as possible. If your spouse was already at the age for RMDs, but you are not, you can transfer the assets to your IRA. This lets you delay distributions until you reach the RMD age.
If your spouse passed away after RMDs had begun but had not yet taken the required distribution for that year, you must complete that distribution before moving the assets.
However, this option can present a drawback for younger spouses. If you roll the funds into your own IRA and later withdraw money before age 59½, the distribution may be subject to the 10% early withdrawal penalty.
Traditional IRA withdrawals are generally taxed as ordinary income. If the inherited account was a Roth IRA and it met the five-year holding requirement, withdrawals could be tax-free. It is also important that the account types match when transferring assets—for example, traditional IRA to traditional IRA or Roth IRA to Roth IRA.
2. Move the assets into an inherited IRA
Another option is to transfer the funds into an inherited IRA, sometimes called a beneficiary IRA.
This approach can be beneficial if you are under age 59½ and expect to access the money soon. Withdrawals from an inherited IRA are typically not subject to the early withdrawal penalty that would apply to distributions from your own IRA.
Spouses who choose this route have flexibility with RMD timing. In many cases, distributions must begin in the year after the account owner’s death, but a spouse may delay them until the year the deceased spouse would have reached the RMD age.
If the original account owner passed away before RMDs were required, withdrawals can generally occur at any time, provided at least the minimum required amount is taken. Larger withdrawals, however, could increase your taxable income for the year.
Inherited Roth IRAs follow similar rules, though distributions are usually tax-free if the account met the required five-year holding period.
3. Convert the assets to a Roth IRA
Another possible strategy involves rolling the inherited assets into your own traditional IRA and then converting them into a Roth IRA.
Roth conversions are not subject to early withdrawal penalties, even if the account owner is under age 59½. However, the amount converted from a traditional IRA to a Roth IRA is generally taxable as income in the year of conversion.
This strategy may appeal to individuals who believe they may face higher tax rates in the future and who have sufficient funds outside retirement accounts to cover the tax bill generated by the conversion.
4. Disclaim the inheritance
In some situations, a surviving spouse may choose to decline all or part of the inherited IRA. If this happens, the assets pass to the next beneficiaries listed on the account—often children, grandchildren, or other heirs.
Disclaiming an IRA can sometimes be part of a broader estate-planning strategy. Although assets inherited from a spouse typically avoid estate taxes initially, they become part of the surviving spouse’s estate later. If the combined value of assets could exceed future estate tax thresholds, passing the IRA directly to other beneficiaries may help reduce the taxable estate.
To be valid, a disclaimer must usually be made within nine months of the account owner’s death and before the surviving spouse takes possession of the assets. Once completed, the decision cannot be reversed.
Reviewing your options
Each of these strategies carries different tax implications and planning considerations. Reviewing your choices with a financial professional can help ensure the inherited IRA is handled in a way that supports your long-term financial goals.
If you are the owner of an IRA yourself, it is also wise to periodically review beneficiary designations and coordinate retirement account planning with your broader estate strategy.
Sources:
https://www.fidelity.com/learning-center/personal-finance/retirement/inheriting-ira-from-spouse
Disclosure:
This information is an overview and should not be considered as specific guidance or recommendations for any individual or business. A ROTH Conversion is a taxable event. Consult your tax advisor regarding your situation.
This material is provided as a courtesy and for educational purposes only.
These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.