The three options
Option 1, Roll it into your own IRA
The inherited account merges into your existing IRA (or a new one in your name). From then on, it's simply your IRA: RMDs start at your required beginning age, calculated on the Uniform Lifetime Table.
Best when: you're over 59½ and don't need the money now. This maximizes the delay (RMDs wait until your own start age) and simplifies everything into one account.
Option 2, Remain as beneficiary of the inherited IRA
You keep it titled as an inherited IRA. RMDs are based on your life expectancy from the Single Life Table, but they don't start until the deceased spouse would have reached RMD age. If your spouse was younger than you, that can delay RMDs beyond your own start age.
Best when: you're under 59½ and might need access to the money. Distributions from an inherited IRA aren't hit with the 10% early-withdrawal penalty, but once you roll it into your own IRA, that protection disappears and the under-59½ penalty applies.
Option 3, Treat it as your own (when you're the sole beneficiary)
If you're the sole beneficiary, you can elect to treat the inherited IRA as your own without a formal rollover, same economics as Option 1, different paperwork. Contribution and RMD rules follow your age from that point.
Best when: same situations as Option 1; it's largely an administrative alternative to the rollover.
The decision, simplified
- Under 59½ and might touch the money? Stay as beneficiary (Option 2) until 59½, then roll it over. This preserves penalty-free access during the gap years.
- Over 59½ and don't need it? Roll it into your own IRA (Option 1). Simplest, and RMDs follow your schedule.
- Spouse was younger than you? Compare carefully: remaining as beneficiary delays RMDs until they would have reached RMD age, which may beat your own start age. Run both numbers.
Don't miss these
- The year-of-death RMD. If your spouse died on or after their required beginning date but hadn't taken that year's RMD, you must take it by December 31 of the year of death, regardless of which option you choose.
- Roth IRAs. No RMDs for you as the surviving spouse if you roll it into your own Roth IRA. If you remain as beneficiary, the 10-year framework doesn't apply to spouses the way it does to non-spouses, but confirm the titling with the custodian.
- Successor risk. Whoever inherits the account from you later will be a successor beneficiary under the 10-year rule. Your choice now shapes their deadline, worth considering in estate planning.