There are three classes of IRA and 401(k) beneficiaries.
Eligible Designated Beneficiaries
These can be spouses, minor children, disabled or chronically ill, any person within 10 years of age of the decedent, and any beneficiary older than the decedent.
Non-Eligible Designated Beneficiaries
Any living person not listed above in the eligible designated beneficiaries section.
Non-Designated (or Non-Human) Beneficiaries
Recognized charities, religious organizations, trusts, your estate, etc.Â
Once you have identified the category above that your beneficiary falls into, the next step is simple.
Eligible Designated Beneficiaries
These beneficiaries may take distributions as slow or as fast as they like.
(This used to be called a Stretch IRA. As it could stretch for a lifetime.)
This is except for the minor child. For them, there is a 10-year deadline for taking distributions. The 10-year clock starts when the child reaches age 18.
Non-Eligible Designated Beneficiaries
These people simply need to complete taking their distributions by the 10th year following the death of the IRA owner. Faster withdrawals are permitted but not required.
Non-Designated (or Non-Human) Beneficiaries
This group must complete taking distributions by the 5th year following the death of the IRA owner. Like above, faster withdrawals are permitted but not required.
For information about the Self Directed IRA or Solo 401k, call IRA Club at 312-795-0988
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