This article is accurate to the best of my knowledge, but you are responsible for verifying the information before using it.

• Introduction
• The Rules
• What Does that Mean?
• What to Do?
• Appendices
• Short Attention Span

The sources used for this article include:

• https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary
• https://www.schwab.com/ira/inherited-and-custodial-ira/inherited-ira-withdrawal-rules
• https://www.fidelity.com/learning-center/personal-finance/retirement/inheriting-ira-from-spouse
• https://www.fidelity.com/learning-center/personal-finance/retirement/non-spouse-IRA
• https://www.investopedia.com/articles/retirement/09/minor-as-ira-beneficiary.asp
• https://www.lordabbett.com/en-us/financial-advisor/insights/retirement-planning/new-rmd-rules–focus-on-eligible-designated-beneficiaries.html
• https://irahelp.com/slottreport/what-life-expectancy-table-should-i-use/
• https://smartasset.com/taxes/irs-inherited-ira-10-year-rule

Some of these definitions are specific to this article/topic.

• Adjusted Gross Income (AGI) – roughly computed as your total income (e.g., wages, interest, capital gains, dividends, rent, etc.) minus various quantities that you can legally deduct (e.g, standard deduction, personal exemption, 401(k) contributions, etc.). There may be specific additions and subtracts that occur after calculating the AGI.
• Designated Beneficiary – a beneficiary that is a spouse, a minor child, or not more than 10 years younger than the deceased IRA owner. This also include an individual that is disabled or chronically ill.
• Earned Income – income received as the result of employment. This income is typically received on a W2 or 1099, but there are exceptions to this. Investment income (capital gains and dividends) and pension income are not earned income.
• Eligible Designated Beneficiary – any individual designated as the beneficiary of the Traditional IRA.
• HSA – Health Savings Account. A type of tax-deferred account that is intended to cover medical expenses.
• Individual Brokerage Account – deposits to the account are taxed in the year of the deposit. Long-term capital gains and qualified dividends are federally taxed at a reduced rate in the year they are received. Short-term capital gains and (normal) dividends are federally taxed as ordinary income in the year they are received. The state tax policy varies by state. Unrealized gains (i.e., growth in the value of the investment) are taxed as long-term or short-term capital gains at the time of sale, but the cost basis (already taxed portion) is not taxed again.
• Required Beginning Date – the first date that the deceased owner was required to begin taking RMDs.
• SECURE Act – This is the Setting Every Community Up for Retirement Enhancement Act. The SECURE Act of 2019 and SECURE Act 2.0 implemented changes to make it easier for employers to offer retirement plans and employees to participate in them. It included deferring RMDs while still working and having to distribute inherited traditional IRA accounts over a set time interval. Some changes are still happening as of 2024. See this page for more details.
• Tax-deferred Account – deposits to the account are not federally taxed in the year of the deposit. Deposits are state taxed in a few states. Deposits can not exceed earned income or deposit limits. Capital gains and dividends earned on the investments in the account are not taxed at the time they are earned. Distributions from the account are taxed as ordinary income. If the state taxed the deposit, a portion might be state tax free. (Health Savings Accounts deviate slightly from this.) Early and late withdrawal are federally penalized.
• Tax-free Account – deposits to the account are federally taxed in the year of the deposit. Deposits can not exceed earned income or deposit limits. Capital gains and dividends earned on the investments in the account are not taxed at the time they are earned. Distributions from the account are federal tax free. Distributions from the account are state taxed in a few states under certain circumstances.
• TCJA – This is the Tax Cuts and Jobs Act. This overhauled the tax code with changes, such as, lowering individual and corporate taxes, doubling the standard deduction, and doubling the tax-free estate value. This is scheduled to expire in 2025. See this page for more details.