I posted this on the Estate Planning board and a few suggested I post it here (which I should have thought of first!)
The real question below is: Can Fidelity be this wrong, or am I just reading their article wrong?
Trying to understand how distributions for an Inherited IRA work related to someone passing away in 2020 or later, with multiple non-spouse beneficiaries.
Fidelity, in the article here: https://www.fidelity.com/learning-center/personal-finance/re… has the following two paragraphs under the option “1. Transfer the assets to an Inherited IRA and take RMDs”:
If the original IRA owner died on or after January 1, 2020
The SECURE Act requires beneficiaries to withdraw all assets from an inherited IRA or 401(k) plan by December 31 of the 10th year following the IRA owner’s death. Exceptions to the 10-year rule include … irrelevant stuff …
If you are listed as a nonspouse beneficiary along with one or more other beneficiaries, it’s important to separate your portion of the decedent’s IRA in your name and then complete your first RMD by December 31 of the year following the original IRA owner’s death. If you don’t meet this deadline, your RMD calculation will be based on the oldest beneficiary’s life expectancy. If that person is older than you are, you will need to take a larger distribution.
Until that last paragraph, it’s consistent with what I see elsewhere – take everything within 10 years, however you choose. Is there a requirement in a multiple beneficiary situation (say two children) for each to take a distribution in the first year?