There are few things to keep in mind when rolling over an inherited IRA to Betterment, as well as to other institutions.
Required Minimum Distributions: At this time, Betterment does not automatically calculate RMDs for inherited IRAs, though we hope to provide this feature in the future. For customers who are on our Premium plan, our team of CERTIFIED FINANCIAL PLANNER® professionals can help you calculate this during one of your scheduled advice calls.
Otherwise, you will need to calculate your RMD by reviewing the “IRA beneficiaries” section of IRS Publication 590-B. We will provide the fair market value of your IRA by December 31st of every year with your tax forms, and you can calculate your RMD using this amount.
No Indirect Rollovers: Non-spouses are not permitted to do an indirect rollover of an inherited IRA under any circumstances. The IRS does allow indirect rollovers of spousal IRAs, however, Betterment recommends adhering to the direct trustee-to-trustee transfer process to avoid any errors—which could cause preventable tax consequences.
Related Articles